A new Economic Advisors Council report found that tariffs do not cause inflation
Thomas Phillipson, former director of economic policy for the Trump administration, discusses President Trump’s trade talks with South Korea and Japan, as well as immigration on the current US economy and “final profits.”
First on FOX: A new report from the Economic Advisors Council (CEA) found that prices of imported goods fell this year and immersed faster. Overall product price Since February.
The CEA, an agency within the president’s executive office, said its findings contradict the Trump administration’s claims. Tariffs in many countries Tax-induced fear around the world and fear will lead to an increase inflation.
The report breaks down the price index for Personal Consumption Expense (PCE), an inflation calculation that was closely watched by the Federal Reserve and financial markets, and the Consumer Price Index (CPI), the inflation gauge most commonly used for imports and domestic components in commonly used inflation calculations.
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According to a CEA report, PCE Index’s overall product prices rose 0.4% from December to May. Meanwhile, the import component of PCE commodity prices fell 0.1% during that same period.
“The CEA directional findings using this method of analyzing PCE are consistent across core products (excluding food and energy), durable goods (lasting at least three years), and non-durability,” the report states. “The contribution to imports to inflation includes both the direct impact of imported final goods for consumption and the indirect impact of imported interim inputs.”
The report shows that a similar analysis of CPI has dropped by 0.8% in imports and flat overall commodity prices.
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Steven Milan, chairman of the Council of Economic Advisors, will speak at the Hill & Valley Forum held at the U.S. Capitol on April 30, 2025. (Getty Images)
According to the report, which claimed that finding a similar pattern of CPI emphasizes the robustness of the results, there are several differences between PCE and CPI inflation.
The CEA report said it compared the imported subindex to overall prices from December to May to grasp the president’s impact. Donald Trump’s His second administration policy.
“The results clearly show that while prices for imported components starting in March are falling, the overall prices have not changed or slightly increased,” the report reads. “Cumulatively, overall PCE prices have risen by about 1.1% since December, compared to about 0.2% of PCE import prices. However, these values include pricing for services that tend to have lower import strength, so divergence can be attributed to sticky service prices.”
Stephen Milan outside the White House on June 17th, 2025. (Getty Images)
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The CEA also acknowledged that its analysis “does not identify counterfactuals where no tariffs are in place.”
“Common and imported prices began to diverge towards the end of 2023 and have been ongoing ever since,” the report said. “The important thing is that there has been no clear trend breakdown so far this year. This analysis suggests that tariffs have not reduced impulse impulse from imported goods as of May.”