Steps taken by US companies delay tariff-driven inflation surge

Despite concerns about a new round of US inflation caused by President Donald Trump's tariffs, price growth remains relatively stable. Consumer prices rose 2.4% in May, below economists’ forecasts, CBS News reports.

The data reflects steps taken by American companies to offset the impact of import levies. Firms were ramping up purchases of goods ahead of the imposition of duties. Now, much of the extra inventory is sitting in warehouses or on store shelves, allowing importers to delay price hikes. Besides, some companies refrain from passing any cost increases through to consumers while awaiting more clarity on Trump’s trade policies. 

Meanwhile, actual duties collected at the US border remain below official rates. Some importers have been able to avoid or delay paying tariffs by storing goods in bonded warehouses or foreign-trade zones.

However, CBS News notes that businesses will not be able to further hold back price increases. According to Gennadiy Goldberg of TD Securities, US inflation is likely to accelerate as import costs rise in the second half of the year.