- Import prices dropped between December 2025 and May 2025 despite heightened tariffs, according to U.S. economic advisor Kevin Hassett.
- Hassett attributes the trend to 'patriotic buying,' with Americans favoring domestic goods over imports.
- The Consumer Price Index (CPI) rose just 0.1% in May 2025, below expectations, with core annual CPI at 2.8%.
A Counterintuitive Tariff Effect
U.S. economic advisor Kevin Hassett has pointed to an unexpected trend in import prices, asserting they declined in the first half of 2025 despite the Trump administration’s aggressive tariff policies. Speaking on recent economic data, Hassett credited the drop to a shift in consumer behavior—what he termed patriotic buying—where Americans increasingly opt for domestically produced goods, reducing demand for imports and mitigating inflationary pressures.
Bureau of Labor Statistics (BLS) figures support part of his claim, showing a modest 0.1% rise in May’s CPI, below the anticipated 0.2%. Core annual inflation also came in slightly lower than forecast at 2.8%. Hassett argued that foreign exporters are absorbing much of the tariff burden, further limiting price increases on imported goods.
Political and Economic Implications
The remarks serve as a defense of President Trump’s trade policies, which many economists had warned could trigger inflation. Hassett framed the outcomes as a direct result of government strategy, emphasizing how policy signals have realigned consumer priorities. Meanwhile, Moody’s Analytics economist Mark Zandi projected that tariff revenues could exceed $300 billion by year-end, underscoring the fiscal impact of the administration’s approach.
Market observers note that if exporters continue to absorb costs, the dynamic could strain U.S. trading partners, potentially reshaping global supply chains. However, long-term consequences—including possible retaliatory measures—remain uncertain. Hassett hinted at further tariff actions in the pipeline, suggesting the trade policy landscape is far from settled.