“Tariffs don’t hit like a storm; they seep like a leak. By the time the floor is wet, the ceiling’s already cracked.”
Nancy rewrites the board again. The price moves from $3.49 to $3.59. She doesn’t write a reason. She just adds a new note at the bottom: No refills on to-go orders.
The chalk squeaks. The Sharpie is almost out of ink. She wipes her hands on her apron and glances at the euro.
The bell rings. A customer walks in.
She hands over a cup without commentary. Just a quiet smile.
Bibliography
1. Federal Reserve Board, FEDS Note (May 9, 2025) . Provides real-time analysis showing that consumer-goods price increases from the 2025 tariffs are already visible in scanner data, consistent with “full and quick” pass-through seen during the 2018–19 tariff round.
2. Maurice Obstfeld, Peterson Institute for International Economics (April 2, 2025) . Warns that the 2025 tariff framework constitutes a direct hit to U.S. real household income and is unlikely to correct trade imbalances—describing the policy as “designed for maximum damage—to America.”
3. Campa, Goldberg, Marazzi & Sheets, various Federal Reserve and IMF studies (2005–2024) . Establish the classic 25–40% exchange-rate pass-through into U.S. import prices, with more recent IMF and BIS-linked research showing pass-through intensifies under high uncertainty and elevated inflation.
4. Jason Furman, Harvard University, via interviews and policy commentary (2025) . Emphasizes the compounding nature of tariffs and dollar weakness—arguing that a politically pressured Fed undermines currency strength and accelerates consumer cost impacts.
5. Janet Yellen, via Reuters (August 2025) . Publicly states that political interference in the Federal Reserve weakens global trust in U.S. dollar assets—calling it rhetoric “you expect from the head of a banana republic.”
6. Congressional Budget Office, Inflation and Tariff Effects Report (June 4, 2025) . Projects that the current tariff regime will raise annual inflation by approximately 0.4 percentage points in 2025–2026 and disproportionately reduce real purchasing power for low-income households.
7. David Mericle, Goldman Sachs (August 2025) . Predicts that by October, about 70% of tariff costs will have passed through to consumers—up from just 22% absorbed as of mid-year.
8. Mary Amiti, Stephen Redding, David Weinstein, “The Return to Protectionism,” AEA Papers & Proceedings (2020) . Found that nearly all tariff costs during the previous trade war were passed to U.S. consumers and importers—empirical groundwork widely cited in current policy debates.
9. Yale Budget Lab, Household Incidence Model (April & July 2025) . Calculates a regressive effect from the 2025 tariffs, with lower- and middle-income households losing $1,200–$1,700 annually in real income due to price increases on essential goods.
10. Reuters Market Desk Reports (July–August 2025) . Trace real-time dollar declines tied to political pressure on the Fed, including public attacks on Governor Lisa Cook, and detail market reactions to Powell’s dovish Jackson Hole signals.
11. Hershey Company, via Reuters (July 22, 2025) . Confirms it will implement a “double-digit” U.S. price increase on chocolate products this fall, citing cocoa costs exacerbated by tariffs and crop failure.