Episode Details

When we hear the word tariff, it is easy to imagine a standoff between nations where one country is footing the bill to pay the other. But if you look at the economics, that is not exactly how it works. In reality, tariffs are essentially a hidden tax on our own economy. When an imported good is taxed, the cost does not just evaporate; it travels through the supply chain until it hits the person standing at the cash register. Data from 2025 shows that nearly all of that cost is passed on to domestic consumers and firms, and that transition happens fast—usually within seven months. Think of it like a ripple effect. It starts at the port, moves to the manufacturer, and settles on your grocery bill. In fact, in 2025 alone, tariffs added about half a percentage point to the inflation we saw in the headline PCE index. It is a quiet, daily increase that adds up over time

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