The effects of tariffs on inflation based on the linear regression model

This paper examines how US tariff changes have affected consumer inflation over the past four decades using linear and quadratic regression models.Combining headline CPI with sub-indices for automobiles and apparel, and applying a 10% trimmed-sample procedure, the analysis tests for both average and nonlinear effects.Once GDP growth, interest rates and unemployment are controlled for, tariffs have little explanatory power for aggregate CPI.Sector-level regressions tell a different story: in autos and apparel small tariff changes barely move prices, but beyond a threshold further increases are associated with sharply higher inflation, consistent with convex, state-dependent pass-through.The findings suggest that tariffs do not operate as a broad engine of US inflation; they mainly reallocate price pressure toward import-intensive consumer goods, with the strength of the response shaped by supply-chain flexibility and market structure.