While tariffs have yet to significantly shift the dial on inflation—prompting individuals like Treasury Secretary Scott Bessent to label them the “dog that didn’t bark”—analysts are widely expecting the hikes to ultimately be paid for by the U.S.

So far the sharpest end of the tariff regime has yet to be felt. President Trump delayed his “Liberation Day” tariffs by three months in order to reach agreements with trading partners.

Some negotiations have proved successful, with framework deals done with the U.K., the EU, and Japan to name a few, drastically lowering tariff rates from Trump’s initial threats back in April. Yet countries that haven’t yet agreed to a deal (which received letters informing them of their new tariff rate) saw their effective export rate rise on the deadline of Aug. 7.

That includes nations like India, which is facing a rate of 25% that may double on Aug. 27 as punishment for buying Russian oil. Likewise, while the Trump administration on many occasions has touted a deal nearly done with China, nothing beyond an agreement to delay tit-for-tat price increases until this week has been confirmed.

With a slew of tariffs now effectively in place, Goldman Sachs believes that the cost absorbed by foreign exporters will grow over time, but will remain low.

Economist Elsie Peng wrote in a note yesterday seen by Fortune that Goldman believes exporters absorbed 14% of the costs of all tariffs in June, which will rise to 25% by October if the sanctions follow a similar trajectory to the price hikes administered by the Trump administration in his first term.

But the portion consumers can expect to pay is also on the rise. Peng noted that around 36% of the 2025 tariff costs were passed on to consumer prices after three months of implementation and around 67% were passed on after four months.

The economist added that “although the pass-through rate appears to be increasing rapidly over time, it still remains somewhat below the pass-through rate that we estimate at the same point in time during the 2018–2019 trade war.”

One portion of the economy that intends to reduce its share is U.S. businesses. The Conference Board released its U.S. CEO Confidence report for the third quarter last week, which revealed 64% are certain they would be passing the price hike on to consumers, and a further 16% said they’re still considering.

This is a higher rate than previously identified (following the prediction of Goldman Sachs) as only in June the New York Fed reported a smaller 45% of services firms were intending to pass on the full extent of their tariff-related increases.

Peng noted that her math “implies that U.S. businesses have absorbed more than half of the tariff costs so far but that their share would fall to less than 10%. This net impact on U.S. businesses likely masks that some companies have absorbed a larger share of tariff costs, while some domestic producers shielded from import competition have raised their own prices and benefited.”

Inflation pass-through

Of course, if consumers are paying higher prices for goods and services then the Federal Reserve’s job of keeping inflation to 2% will only get more difficult.

Goldman Sachs believes this will be the case, writing, “Our analysis implies that tariff effects have boosted the core PCE price level by 0.20% so far.

“We expect another 0.16% impact in July, followed by an additional 0.5% from August through December. This would leave core PCE inflation at 3.2% year over year in December, assuming that the underlying inflation trend net of tariff effects is 2.4%.”

Reflecting on the June consumer price index report (the latest available at the time of writing), Macquarie’s North America economists David Doyle and Chinara Azizova commented that the data was already showing hints of pass-through inflation.

They wrote last month: “Notable price pressures were apparent in household furnishings and supplies, apparel, video and audio products, sporting goods, and toys. This list suggests impacts from tariffs on the data. One measure that reflects this is core goods ex used cars and trucks. This accelerated to +0.3% MoM, its strongest pace since Feb-23. It also shows an accelerating monthly trend.”

Many economists are hoping Fed Chairman Jerome Powell will see through this inflation and lower the base rate, in part to offset an alarming jobs report from the Bureau of Labor Statistics a matter of weeks ago. But analysts can’t hold their breath. After all, Powell made the point at his last press conference that by not raising rates (a move which truly would have upset markets) he is already seeing through such pressures.