Who’s bearing the cost of tariffs? When it comes to tariffs, the focus shouldn’t just be on negotiation progress but rather on two key points: 1. Changes in the effective tariff rate in the U.S. According to CICC’s calculations, based on monthly tariff revenue, the actual effective tariff rate has already risen to 10.6%. It’s estimated that the theoretical effective rate in this round could climb to 16–17% (some goods are exempt). 2. Who’s actually bearing the cost of tariffs? To put it simply, it’s all the links in the supply chain: producers, exporters, importers, wholesalers, retailers, and consumers—each taking on a different proportion of the tariff cost. This also determines the intensity and pace at which tariffs translate into product inflation. CICC’s analysis here is solid: companies’ pricing strategies indicate that tariffs do indeed pass down to the consumer end, but supply chain adjustments also show that overseas importers have absorbed part of the pressure. This partly explains why inflation over the past four months has been relatively mild. If the cost-sharing ratio and tariff rates don’t change significantly in the future, inflation pressure may continue to manifest in a moderate way—or even be delayed until Q4, peaking by year-end. We estimate that the overall CPI and core CPI impact from tariffs won’t exceed 1.0 percentage point, with year-on-year figures for December at 3.2% and 3.4%, respectively, and March next year at the same levels (see chart 4). Keep an eye on whether tariff cost-sharing undergoes nonlinear changes, especially for discretionary consumer goods. U.S. companies seem inclined to accelerate price hikes in the second half of the year. Among them, discretionary consumer goods pricing strategies are more aggressive, and if this happens, it could exert greater pressure on inflation—particularly for categories like used cars, which have been heavily impacted by seasonal adjustments in recent months.