US Import Prices Rise at Fastest Pace Since March 2022

The cost of goods arriving at U.S. ports last month increased at the fastest pace in four years, new Bureau of Labor Statistics data released on March 25 show.

February’s import prices rose by 1.3 percent—the largest increase since March 2022—following an upwardly revised 0.6 percent jump in January.

Markets had estimated a reading of 0.5 percent.

While President Donald Trump’s tariffs are not included in the import price indexes, they can still highlight the indirect effects of the administration’s trade policies. These can include foreign exporters passing some of the tariff costs on to consumers or lowering their prices to maintain market share.

Recent economic data may also suggest that the expansive levies are traversing through the marketplace.

Producer inflation—a measure of prices paid for goods and services by businesses at the wholesale level—has risen for four consecutive months, including a 0.7 percent spike in February.

Economic observers and monetary policymakers are waiting to determine whether these higher import duties will result in one-time price hikes or trigger persistent inflation challenges for the U.S. economy.

The expectation among Federal Reserve officials is that they will likely reach their peak sometime in the second or third quarter.

The latest trade figures, meanwhile, were recorded before the war in Iran, suggesting that inflationary pressures may already have been brewing prior to the U.S.–Israeli Operation Epic Fury.

But market watchers were given a sneak peek of what to expect in upcoming inflation data.

The preliminary March S&P Global survey reported that U.S. businesses paid more for inputs and requested higher prices, pointing to rising energy costs and supply chain challenges.

“Companies are reporting a hit to demand from the additional uncertainty and cost of living impact generated by the conflict,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a report.

“Travel, transport and tourism related issues are compounded by financial market jitters and affordability constraints, notably including concern over the impact of higher interest rates, surging energy prices, and supply chain delays.”

Despite enduring higher tariff-related costs, many U.S. companies have been reluctant to pass on these expenses to their customers, according to the Fed’s latest Beige Book report.

“Some firms continued to pass tariff-related cost increases through to their customers, and others began to do so after having absorbed previous increases,” the March 4 report reads.

“Still, most Districts received reports of some firms holding selling prices stable despite higher costs because their customers were increasingly price sensitive.”

The Beige Book is a periodic summary of economic conditions across the Fed’s 12 districts.

Inside Trade Prices

Higher prices for fuel and non-fuel imports accounted for a majority of last month’s jump.

Prices for fuel imports rose by 3.8 percent after a 1.2 percent decline the previous month. This represented the sharpest jump since April 2024, caused by petroleum and natural gas.

Prices for non-fuel imports—mainly capital goods, industrial supplies and materials, and consumer goods—advanced by 1.1 percent following a 0.8 percent jump to kick off the year.

Likewise, export prices climbed at a higher-than-expected pace of 1.5 percent, up from January’s 0.6 percent increase. This was also the biggest boost since May 2022, fueled by a higher price index for agricultural shipments and non-agricultural commodities.

Canada was the primary culprit for a surge in import prices, with the cost of Canadian goods entering the United States rising by 1.6 percent. This was followed by Japan (0.7 percent), the European Union (0.6 percent), and China (0.5 percent).

Following the Supreme Court’s ruling last month that struck down the president’s use of sweeping emergency tariffs, Trump implemented a 10 percent universal baseline tariff. He also threatened to raise the rate to 15 percent.

Prior to the reversal of the administration’s reciprocal tariffs, the White House was narrowing America’s month-to-month trade deficit.

The fourth-quarter current account deficit—an expansive gauge of the nation’s economic transactions with the rest of the global economy—fell to $190.7 billion, from $239.1 billion in the previous three-month span.

Despite changes to the administration’s trade agenda, tariff income continues coming in, according to Treasury Department data.

As of March 23, monthly tariff revenues exceeded $23.4 billion, far higher than what was recorded at the same time in February.