https://www.frbsf.org/wp-content/uploads/wp2025-26v2.pdf

https://economistwritingeveryday.com/2025/12/12/do-tariffs-decrease-prices/

• The paper doesn’t answer what will happen to the price of a specific good when tariffed. Instead, it’s answering whether “tariff shocks” have a larger effect on aggregate supply or demand
  • It’s possible that total import spending goes up due to higher prices, or goes down due to newly attractive domestic substitutes.
• The paper finds that demand dominates, with an initially negative impact on inflation and a positive impact on unemployment
  • Domestic uncertainty reduces consumers’ willingness to spend and investors’ willingness to invest
  • uncertainty reduces the expected value of assets, and consumers experience a negative wealth shock, reducing their willingness to consume