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3w ago

U.S. Companies Stockpile Inventory to Sidestep Trump’s Tariffs, Keeping Inflation in Check

Economists warn this front-loaded demand may drive inflation higher later this year

Mark Cuban said on social media on Sunday tariffs may lower prices in some cases as companies try to get rid of inventory they stockpiled to avoid the levies.
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Overview

  • Businesses are using cash reserves or taking on loans with interest rates up to 20% to bulk-buy inventory ahead of anticipated tariff hikes
  • Front-loading has restrained consumer price gains but imposes heavy costs through lost interest income and escalating debt
  • Walmart has signaled upcoming price increases, while some other retailers are discounting stock to free up cash and reduce liabilities
  • Goldman Sachs economists project core PCE inflation could climb to about 3.6% by end-2025 due to surging pre-tariff demand
  • The Federal Reserve’s preferred inflation gauge has cooled, but officials are cautious about cutting rates until tariff-related uncertainties ease