A new research report from IPRoyal has revealed that reciprocal tariffs during the 2025 US-China trade war triggered price rises. This included a 1.8% rise on average, with some categories reaching 2.04% (compared to a 0.39% baseline), weeks before any tariffed goods could reach store shelves.
The research conducted a comprehensive analysis of 1,900 consumer products and tracked prices across 19 product categories (100 products per category) from September 2024 to August 2025. The findings challenge conventional assumptions about how tariffs affect consumer prices.
The key findings from the research included:
- During Liberation Day (2nd April 2025) and the subsequent trade war period (until 12th May 2025), prices increased at a rate of up to 2.04% per two-week period, more than five times the baseline rate of 0.39%
- Nearly 43% of all tracked products showed price increases during the trade war period
- Unilateral tariffs had a minimal impact, with an average increase of only 0.44%
- Actual supply chain disruptions from Red Sea shipping attacks produced no measurable price effects
- 21% of product categories that experienced the April price spikes later reverted to below-baseline prices
“It is clear from the research conducted that trade war policy announcements may have a previously underappreciated effect on prices,” said IPRoyal’s Justas Vitaitis, the project’s Lead Researcher. “While a corporate greed narrative may seem enticing, our findings are just as important to policymakers.
“Over the six weeks of the 2025 trade war, US consumers paid elevated prices on goods already purchased at pre-tariff costs. Yet, putting the entire blame on retailers would be akin to blaming investors for selling stocks during periods of financial uncertainty. There were other market forces at play, and policymakers should adapt accordingly.”
The research also found that the manner of tariff announcement, such as the unprecedented scope, high visibility, and explicit ‘trade war’ framing of Liberation Day, created conditions where widespread price increases faced minimal competitive pressure.
Karolis Toleikis CEO of IPRoyal added: “For consumers, the implications were significant: during the six-week trade war period, shoppers paid elevated prices on pre-tariff inventory, transferring wealth to retailers as windfall profits rather than to governments as intended tax revenue.
“Overall, it is clear that high-profile, politically charged tariff announcements produce bigger and faster price hikes than quietly implemented policies. The way trade policies are announced may harm consumer welfare more than tariffs themselves and should be considered in the future.”
Read the full research here: https://iproyal.com/trade-wars-and-price-hikes.pdf
