Tariffs are a tax that American companies pay to the U.S. government when importing goods. To make up their bigger tax bill, those companies tend to hike prices.
Ahead of potential tariffs, companies are trying to get more foreign goods into the country — and faster. Space seems to be available, unlike a few years ago.
Carola Binder, an economist at the University of Texas at Austin, explains why tariffs might cause prices to rise, but they doesn’t necessarily mean the Fed will get involved right off the bat.