Emergency tariffs of 25% now, 50% tariffs in a week, on all Colombian imports.
Well, let’s see. In 2023, about 27% of unroasted coffee imports were from Colombia. Coffee accounts for 0.2% of CPI weights. Suppose fixed proportions hold in the very short term; then assuming 100% tariff pass through, we get a one time jump in inflation equal to .3 percentage points (on an annualized basis).
What about everyday expenses? The AIER Everyday Price Index (EPI), which has been discussed here, covers about 37% of the CPI according to this working paper, and focuses on frequently purchased items. Assuming we can blow up the .2% of CPI proportionately to the AIER EPI, then the m/m one time jump in inflation is about 1.34 percentage points (annualized).
For all the people who stressed the import of “everyday” prices over CPI, this is the number for you.
Thanks, Trump!