Americans got a double dose of bad news about prices this week. On Wednesday, the government reported that inflation had climbed to 3.7 percent, with gasoline and other everyday expenses taking a bigger bite. Meanwhile, new research from the Federal Reserve Bank of New York shows that tariffs have been making things more expensive, including products made right here in America. Here’s the bad news. Even if those tariffs are reduced or struck down (again), much of the increase in prices will stick around.

Let’s start with the latest Consumer Price Index report, released by the Bureau of Labor Statistics. Over the past year, prices have risen 3.7 percent, up from 3.4 percent in August. Gasoline was the biggest culprit, rising 9.1 percent in September and accounting for more than half the month’s overall increase. Gas prices are now up 34.2 percent over the past year, mostly as result of the fallout from the war in Iran. Overall, energy costs are up 20.4 percent over the year. Food prices were unchanged month-to-month in September but are still up 2.5 percent over the past year, and eating out costs 3.5 percent more than it did a year ago.

Strip out food and energy, which tend to swing around more dramatically, and what economists call core inflation still increased 2.6 percent over the past year. Housing costs rose 0.4 percent for the month, while used vehicles, clothing, medical services, and airline fares also became more expensive. In fact, airline fares are up 22.4 percent over the past year. Ouch.

The administration’s tariff war is also part of the explanation. On October 6, economists at the Federal Reserve Bank of New York published new research examining how tariffs work their way into consumer prices. The researchers estimate that a 10 percent tariff on all imports would raise consumer goods prices by about 2.6 percent over the following year. The administration has imposed tariffs ranging from 10 percent to 50 percent or more on imports from various countries, along with separate tariffs on products such as steel, aluminum, and automobiles. Roughly two-thirds of that increase would come directly from higher prices on imported consumer goods. The remaining third would come from higher prices on goods manufactured in the United States.

For imported goods, the process is straightforward. When an American company imports a product, it pays the tariff to the federal government. The company can absorb the expense, raise prices, or do a little of both. About half the direct price increase shows up within three months, with the rest appearing within six months.

But the Fed found that tariffs have also made American-made products more expensive, and those increases take longer to reach consumers. Tariffs raise the cost of imported raw materials and components, making domestic production more expensive. American manufacturers may also see an opportunity to raise prices because their foreign competitors have become more expensive. These indirect effects more than double between the sixth and twelfth months after a tariff increase.

In other words, reducing the tariff doesn’t undo all the damage. The direct effects on imported goods may ease relatively quickly, but the indirect effects on American manufacturers take longer to unwind. Businesses don’t necessarily lower prices just because one of their costs has fallen. There’s an old saying that prices go up like a rocket and come down like a feather. Tariffs seem to be a case in point.

Projections through September 2027 are not good either. Tariffs imposed on Canadian goods in August are still working their way through the economy, and additional tariffs on Canadian vehicles and auto parts aren’t scheduled to take effect until January 2027.

The two reports show an economy where new inflationary pressures are being added to costs that have already risen. The latest inflation numbers show Americans facing another round of price increases, especially for energy. The New York Fed’s research shows that tariffs have already added to the cost of consumer goods, including those made in America, and that much of the increase will remain even if the tariffs are reduced or struck down.

Keep this in mind, too. If courts strike down the administration’s tariffs, as they have before, and the government has to refund the importers who paid them, there’s no automatic refund for the shopper who paid more at the register. Some of those savings could eventually make their way back to customers, but it is difficult to see how that would work in practice.

At Taxpayers for Common Sense, we spend a lot of time looking at what government decisions cost taxpayers. Recent tariffs are a particularly expensive example. They have raised prices for American families and businesses, while much of the revenue they were supposed to generate for the Treasury is now disappearing. That’s because the administration decided to go it alone, without Congress, rather than take the slower legislative route. But bypassing Congress has come with a cost. The courts struck down the tariffs imposed under emergency powers, the Treasury must refund the money, and consumers are still paying higher prices. That’s what we call bad policy.

Washington may be able to put an end to the tariffs, one way or another, but it can’t so easily reverse the damage to taxpayers’ wallets.