Reveals price increase of 6% for tariffed goods in Canada, indicating economic implications.
How do import tariffs affect retail prices? We combine daily product-level posted prices from seven major Canadian retailers with product-level tariff exposure to estimate tariff effects in a difference-in-differences framework. Prices of tariffed goods rose gradually, peaking at 6% after three months, implying pass-through of roughly one quarter of the 25% tariff. We find little spillover to untariffed substitutes and a rapid reversal of price effects after tariff removal. Adjustment occurred mainly through the frequency of price changes. Pass-through shifted with trade-policy news and was larger for products labeled “Tariffed”, showing that tariff-induced inflation depends on policy expectations and tariff salience.
No takes yet. Share an insight, caveat, or question.
Cavallo et al. (2026) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: