Every time you hit the checkout line, the total at the bottom of the receipt tells a frustrating story.
We’ve been hearing about cooling inflation for months, yet your favorite brands are still jacking up prices. If you’re wondering why the math isn’t adding up, you aren’t alone.
The truth is, businesses are done playing nice. For a while, they tried to suppress prices ahead of the holidays to keep us coming back.
Now? They’re passing their rising costs directly to you, and a massive chunk of those costs comes from recent tariffs.
The end of corporate patience
We’re seeing a fundamental shift in how companies handle their bills. According to a recent report from the Wall Street Journal, businesses big and small are rolling out “high-single-digit” price increases.
Whether it’s clothing companies like Levi Strauss, spice-makers like McCormick or automakers like BMW, companies are reaching a breaking point. They’re prioritizing their profit margins over your loyalty.
If you think lower inflation means lower prices, I hate to be the bearer of bad news. Inflation measures the rate at which prices increase.
While it slowed from its 9% peak a few years ago to around 2.4% this January, prices are still climbing.
Disinflation — declining inflation — isn’t deflation. For prices to actually drop across the board, the economy would have to grind to a halt, and trust me, you don’t want the chaos that comes with that.
Who actually pays for tariffs
Here’s a financial myth I love to bust: Politicians love to claim that foreign countries and businesses pay for tariffs. That isn’t true now, and it never has been.
When the government slaps a tariff on imported goods, the foreign exporter doesn’t just eat the cost. They pass it right down the supply chain until it lands squarely in your lap.
Don’t just take my word for it. Independent data makes this brutally clear:
- The 96% reality: A recent study by the Kiel Institute for the World Economy analyzed $4 trillion in shipments and found that American consumers and businesses are paying 96% of the cost of recent U.S. tariffs. Foreign exporters absorb a measly 4%. That means the $200 billion in customs revenue the government collected last year wasn’t paid by foreign powers — it was essentially a consumption tax extracted directly from your wallet.
- The Fed’s warning: The Federal Reserve Bank of New York recently released a report showing that U.S. consumers and firms paid nearly 90% of the cost of the 2025 tariffs, with the burden ultimately falling on consumers.
- The household hit: The nonpartisan Tax Foundation calculates that these trade policies cost the average American household roughly $1,000 last year. If things don’t change, that number is expected to jump to $1,300 in 2026.
(See “Here’s How Much Tariffs Cost Americans Last Year — and What to Expect in 2026.”)
The shrinkflation illusion
Retailers are getting more aggressive with how they hide these hikes. You’ve likely noticed shrinkflation — where the bag of chips stays the same price but holds less than it did before.
Or maybe it’s skimpflation, where the quality of the service or ingredients drops while the price stays steady.
Either way, you’re getting less for your money.
(See “Are Your Tic Tacs Really Shrinking? How Inflation and Shrinkflation Go Hand-in-Hand.”)
How to fight back
You don’t have to just sit there and take it. While you can’t control international trade policy, you can control where your money goes.
- 1. Audit your invisible spending: Check your recurring subscriptions and auto-reorders. These are the places where creeping price hikes can happen without you noticing.
- 2. Ditch the brand loyalty: If your go-to detergent or favorite jeans just jumped in price, it’s time to shop around. In many cases, generic alternatives offer the exact same quality, but you aren’t paying for the fancy marketing or the tariff markup.
- 3. Shop by unit price: Don’t look at the final price tag. Look at the small print on the shelf that lists the price per ounce. Comparing unit prices across different brands and sizes is the easiest way to defeat shrinkflation. (See “Cut Your Grocery Bill by Hundreds of Dollars With This One Small Change.”)
- 4. Time your big moves: If you’re planning a major purchase like a car or an appliance that relies on imported parts, do your homework now. With supply chain shifts and ongoing trade disputes, the price you see today might be the lowest you’ll see for a while. (See “9 Ways to Avoid Price Hikes Due to Tariffs.”)
The bottom line is simple: Nobody is coming to save your budget. You’ve got to be your own advocate.
Keep your eyes on the receipts, stay skeptical of political promises and don’t be afraid to walk away when the price doesn’t match the value.
