Inflation has recovered since President Donald Trump announced new import tariffs in April. The latest consumer price index data shows a massive increase in tariff-sensitive categories such as coffee, toys, and television.
CPI data released Thursday showed that total prices for August rose 2.9% from the previous year, up from 2.7% in June and July. CPI measures the cost of a wide range of everyday goods and services, including groceries, rent, and medical care.
This causes inflation to drift far from the Federal Reserve 2% target. Core inflation, which excludes volatile food and energy prices, rose 0.4% in August, the largest monthly increase since January, up 3.1% from the previous year.
Taken together, this means greater pressure on everyday household expenditure.
How tariffs are supplied to inflation
Trump’s sweeping tariffs were first announced in April, but the impacts have been unevenly manifested as goods pass the supply chain at different rates and imports constitute a larger share than other products.
Still, according to the Federal Reserve Bank of San Francisco, they still have a “big price impact.”
For example, consider a banana. Prices rose 4.9% from April to August. This corresponds to about 15% of the annual pace. Virtually all US supplies come from Central and South America and are currently subject to 10% tariffs.
Bananas aren’t the only industry affected. The Federal Reserve Beige Book Survey in August said all regions were seeing tariff-related price increases across sectors, from food and retail to manufacturing and healthcare, and many companies report that they have begun to pass those costs to consumers.
Overall, Americans are currently facing an average tariff rate of 17.4% (highest since 1935). This is estimated to cost $2,300 in 2025, according to the Yale Budget Lab. (These estimates include tariffs imposed under the International Emergency Economic Force Act.
To understand where other inflation is heading, let’s look at five of the five most affected products since April, compared to historical norms for the same period of the past decade.
coffee
Coffee prices rose 9.8% from April to August, including a 3.6% spike last month. The poor harvest earlier this year was already intensifying supply, but prices rose dramatically faster after new import duties.
The market is particularly exposed to import duties, as the US is less than 1% of the coffee it consumes. Global tariffs, which began at 10% in April, were raised sharply in major suppliers such as Vietnam and Indonesia.
Brazil, which supplies more than a third of the US Arabica beans, was hit with a 50% mission on August 6th.
Jewelry and watch
Jewelry and watch prices skyrocketed 5.5% in August, well above the historic average monthly average of 0.8%.
The US relies heavily on imports of premium jewelry and its components, and since April, 10% tariffs have been widely applied to this category.
However, the prices are still high. On August 7, the US raised tariffs on all Swiss imports, including watches, to 39%, far exceeding the baseline. Switzerland supplies more than 90% of US imported precious metal wrist watches, according to the Wall Street Journal.
The US has also expanded tariffs to India and Japan, leading suppliers of cut and synthetic diamonds. It will export premium mechanical watches to the US and will push the gem up and outweigh the prices in the coming months.
banana
Bananas, a stable category of CPI, typically saw an unusually sharp 4.9% increase between April and August. The US market is directly exposed to customs duties, including the 10% bow obligation imposed in April, as almost everything imported from Central and South America is imported.
Bananas remain cheap compared to most fruits and vegetables and have a reputation for their long-term price stability. Reflecting its stability, Trader Joe held the banana price at 19 cents each for over 20 years, and raised it to just 23 cents in early 2024.
tv set
TV prices rose 2.5% in August and 3.1% since April.
The increase may seem modest, but TV prices have been on a downward trajectory since the late 1990s. The rise in “smart” televisions, which generate revenue from manufacturing efficiency and advertising and data collection, helped to lower sticker prices.
Almost all televisions sold in the US are imported primarily from Mexico, China and Vietnam. Imports from Mexico could face up to 25% tariffs depending on compliance with USMCA regulations, but some shipments from China face 30% high, and Vietnamese televisions generally face 20% obligations.
Summer rises in prices stand out as a break from the usual patterns of products that usually get cheaper over time.
Toys
Toy prices rose 2.5% between April and August, a 4-month sudden profit since 2021.
Like televisions, toys are primarily manufactured overseas, with about 70% of US imports coming from China. The tariff classification is not always clear, but many Chinese toy imports may be subject to a tariff of around 30% depending on the classification, while some shipments from Vietnam may be taxed at a higher rate.
The increase is noteworthy as toy prices have been on a long downward trajectory.
Do you want to stand out, grow your network and get more employment opportunities? How to sign up for CNBC’s Smarter to build a standout personal brand online, online, in-person, in the workplace. Learn how to showcase your skills, build a great reputation, and create a digital presence that AI can’t replicate.
Additionally, we request that you sign up for CNBC to connect with experts and peers in our newsletter, money, and life to get tips and tricks for success in the workplace.
