Nearly half of businesses in the Mid-Atlantic region that have incurred tariff costs say they still intend to raise prices in order to offset those expenses, according to research published Wednesday by the Federal Reserve Bank of New York.
The study found that just under one-third of surveyed firms anticipate raising prices within the next six months. Another portion of respondents indicated they plan to implement price increases at a later date, extending tariff-related price adjustments beyond the near term. The New York Fed's economists wrote that these patterns imply inflationary pressure from tariffs could continue for an extended period.
Researchers attribute the delayed timing of some price increases to a few specific factors identified in the survey. One is the presence of existing contracts that have prevented firms from immediately passing higher costs through to customers. When those contracts expire or are renegotiated, firms can adjust prices to reflect the tariff-related cost increases.
In addition, some firms are deliberately spreading tariff-related increases over time using a "trickle up" approach. The report explains that this strategy is used to moderate the impact on customers by avoiding abrupt, large increases.
The survey covers businesses operating in New York, parts of Connecticut and New Jersey, Puerto Rico and the U.S. Virgin Islands. The New York Fed cautioned that the findings describe the experience of firms in those areas and do not necessarily reflect national trends.
In a television interview on Tuesday, John Williams, president of the New York Fed, said that, broadly speaking, the effect of tariffs on prices appears to be near its peak impact.
The New York Fed earlier this year published research indicating that most tariff increases had been passed through to consumers rather than absorbed by foreign producers, a finding that ran counter to the position expressed by President Donald Trump.
Overall, the survey signals that a significant share of tariffed firms in the region have not completed the pass-through of tariff costs to prices and expect to continue doing so over both the near and longer term. Contractual timing and gradual pricing approaches are key mechanisms behind that delayed pass-through, and New York Fed economists flag the potential for sustained tariff-driven inflationary pressure as a result.