This holiday season, many American families are finding their budgets under strain by the Trump administration’s trade and economic policies. December is usually a bright spot for households, but the administration’s unprecedented tariffs are driving up prices on consumer goods and cutting into what families can afford.
The Trump administration’s tariffs are fueling inflation
Despite the Trump administration’s claims that other countries would pay for its tariffs, President Donald Trump’s tariff policies are undoubtedly making life more expensive for Americans. According to analysis from the Harvard Business School (HBS) Pricing Lab, the price of imported goods rose about 4.0 percent between March and September 2025, while domestic goods rose 2.0 percent. Relative to pre-tariff trends from October 2024 to March 2025, this reflects price increases of 5.4 and 3.0 percent, respectively, and accounts for an added 0.7 percentage-point increase in inflation measured by the consumer price index (CPI) as of August 2025.* (see Figure 1)
A separate analysis from the Federal Reserve Bank of St. Louis examined another inflation measure, the personal consumption expenditures (PCE) price index, and found that from June to August 2025, “tariffs explain roughly 0.5 percentage points of headline PCE annualized inflation,” out of a total of 2.85 percent.
Holiday purchases are among the hardest hit by tariffs
Many of the goods most affected by the Trump administration’s tariffs are items Americans often purchase during the holiday shopping period. Data from the HBS Pricing Lab show noticeable price increases for toys, personal care products, and small appliances such as air fryers and coffee machines. Several product categories show especially steep price increases, including clothing accessories, jewelry, and household tools. (see Table 1)
Importantly, the HBS data also show that price increases attributable to tariffs appear in domestically produced goods. This occurs for various reasons, including the fact that some domestic producers rely on imported components; reduced competition from foreign products can give companies room to raise prices; and expectations of higher inflation can prompt firms to raise prices in anticipation of future cost pressures.
Tariffs are also raising prices for everyday goods
Outside of holiday shopping, the Trump administration’s tariffs are also driving up prices on everyday products Americans rely on. Several major companies have announced they are, or are likely to be, raising prices as a result of tariff costs—including Procter & Gamble, which produces essentials such as laundry detergent, toilet paper, and toothpaste; Kraft Heinz, the maker of food staples like macaroni and cheese, Lunchables, and different condiments; and Conagra, which makes food items like Hunt’s ketchup and canned food. Large U.S. retailers such as Walmart and Dollar General have also announced price increases.
Consistent with these announcements, the HBS Pricing Lab data show that prices relative to pre-tariff trends have risen across several key categories, including laundry and cleaning supplies (up 4.7 percent) and common food items such as meat (6.2 percent) and fruit (5.5 percent).
Worse still, Americans will continue to face higher prices in 2026 if the Trump administration’s tariff policies remain in place. In 2025, many retailers absorbed some of the administration’s tariff costs, and several used temporary pauses in tariffs to stock up on inventories, allowing them to limit price increases for their customers. Retailers such as Walmart also loaded tariff costs onto products with inelastic demand to limit price hikes on items that face tighter competition. Each of these strategies, though, is likely time-limited. With Trump’s tariff policies expected to remain in place, Americans will face even higher prices in the year ahead as businesses pass on a higher share of the cost to consumers, a conclusion echoed by analyses this fall from Goldman Sachs economists and the Federal Reserve Bank of St. Louis.
Conclusion
This holiday season, the cost of the Trump administration’s tariff policies is evident on store shelves and in household budgets, and those costs are becoming impossible for Americans to ignore. Trump railed against foreign nations in his tariff announcement, but in the end, it is Americans who are paying for the administration’s poor trade and economic policies.
Methodology
The author simplified several product categories used by the HBS Pricing Lab for clarity. Listed below are the detailed categories from the Pricing Lab research referenced in this analysis, alongside specific items included in each, based on categorizations from the Classification of Individual Consumption According to Purpose (COICOP):
- Clothing accessories: “Other articles of clothing and clothing accessories,” including hats, scarves, gloves, and belts
- Jewelry: “Other personal effects,” including jewelry and watches
- Household tools and equipment: “Major tools and equipment,” including electric tools, hand tools, lawn mowers, and other gardening equipment
- Household appliances: “Major household appliances whether electric or not and small electric household appliances,” including cooking machines (e.g., air fryers, rice cookers, and coffee machines), refrigerators, laundry appliances, and cleaning equipment
- Personal care appliances and products: “Electrical appliances for personal care; other appliances, articles and products for personal care,” including hair-styling tools, personal hygiene care products, makeup, and perfume
- Games, toys, and hobbies: “Games, toys and hobbies,” including game consoles, video games, toys of all kinds, and board games
- Coffee, tea, and cocoa: “Coffee, tea and cocoa,” including coffee and coffee substitutes, tea, and cocoa
- Meat: “Meat,” including the meat of cattle, buffalo, pig, and poultry
- Fruits: “Fruits,” including fresh, frozen, and dried
- Household essentials: “Non-durable household goods,” including detergents, cleaning supplies, garbage bags, and household paper products
- Bread and cereals: “Bread and cereals,” including bread, bakery products, breakfast cereal, pasta, and rice
*Author’s note: The pre-tariff trends were estimated by the Harvard Business School researchers using price data observed between October 2024 and March 2025, prior to the new tariff announcements. This baseline was used to identify how much post-tariff prices deviated from the path they had been following.