Will non-petroleum import price index exceed 112 by October 2026?
The Condition
US blanket tariffs (Section 122 or successor authority) of at least 10% remain in effect on July 24, 2026
Our Ensemble Estimates
Given tariffs persist: Will non-petroleum import price index exceed 112 by October 2026?
Given tariffs expire: Will non-petroleum import price index exceed 112 by October 2026?
Causal Effect
Tariff persistence has a large positive causal effect on import price inflation. If tariffs persist, the ensemble estimates a 50% probability of the non-petroleum import price index exceeding 112 by October 2026, driven by inventory buffer exhaustion triggering accelerated pass-through of accumulated 18-20pp cost pressure (tariff + FX). If tariffs expire, the probability drops to 15%, as the primary cost driver is removed and FX pass-through alone is insufficient to bridge the 3.3% gap. The 35pp causal delta reflects the centrality of blanket tariffs to import price dynamics.
Why This Matters
Tests whether tariff pass-through accelerates once inventory buffers are exhausted. The non-petroleum import price index currently stands at 108.41, with only 6% tariff pass-through after 12 months as firms absorbed costs through margin compression. Beige Book contacts report pre-tariff inventories are depleting, signaling the absorption phase is ending within 2-6 months. If blanket tariffs persist, the 15% Section 122 rate plus the 7.6% dollar depreciation (~2-3pp import cost pressure) should produce accelerated pass-through once the inventory buffer is exhausted. The 112 threshold represents approximately 3.3% import price inflation from current levels.
Resolution Criteria
BLS Import/Export Price Indexes report for September 2026 data (released mid-October 2026) shows the non-petroleum import price index at or above 112.0
Source Analysis
Non-petroleum import prices at 108.41; absorption buffers depleting with only 6% pass-through after 12 months — Beige Book signals acceleration within 2-6 months