Import Prices -0.4% Headline Cool, But Nonfuel +4.5% Y/Y — Tariff Pass-Through Confirmed

Fundamentals · 2026-08-18

Import Prices m/m -0.4% July (BEAT, largest decline since May 2025) — Import Prices Y/Y +5.9% — Fuel imports -7.2% m/m (petroleum -7.5%, natgas +5.3%; fuel Y/Y +25.2%) — Nonfuel imports +0.4% m/m — Nonfuel Y/Y +4.5% (LARGEST since June 2022) — Capital goods +0.9% (semis, machinery, aircraft) — Foods +0.9% — Automotive +0.2%

What Is This?

What it is: BLS monthly Import and Export Price Indexes — publishes: (1) Import Prices m/m (headline); (2) Import Prices Y/Y; (3) Fuel vs Nonfuel breakdown; (4) Export Prices; (5) By category (capital goods, foods, autos, consumer).
Why it matters: Direct measure of tariff pass-through. Nonfuel Import Prices +0.4% m/m and Y/Y +4.5% (LARGEST since 2022) = Trump 10-12.5% tariffs Aug 3 pass-through CONFIRMED entering supply chain. Directly contradicts CPI dovish narrative.

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Summary

Split print. Headline Import Prices -0.4% m/m — BEAT vs ~0.0% est, largest monthly decline since May 2025. Driven by Fuel imports -7.2% m/m (petroleum -7.5%; natgas +5.3%; fuel Y/Y still +25.2%). But Nonfuel Import Prices RIPPED +0.4% m/m and Y/Y +4.5% — LARGEST YEAR-OVER-YEAR ADVANCE SINCE JUNE 2022. This is direct evidence of TARIFF PASS-THROUGH CONFIRMED at the import level. Capital goods +0.9% (computers, semiconductors, industrial machinery, aircraft), Foods +0.9%, Automotive +0.2% — all tariff-exposed categories rising. Only nonfuel industrial supplies fell (-0.5%). Y/Y overall Import Prices +5.9% still hot annually. Export Prices m/m -1.3% (Y/Y +8.2%). Cross-print with today's macro stack: dovish CPI narrative (Core Y/Y 2.5%) directly CHALLENGED by Nonfuel imports 4.5% Y/Y highest since 2022. Aligns with PPI Core +0.4% hot, Empire Prices Paid 58.6 HOT, UoM 1-yr Inflation Expectations UP to 4.3%. Warsh's "supply shocks" thesis fully vindicated on tariff channel. Fed cut path still near-certain but tariff pass-through beginning to embed = 25bp more likely than 50bp. Long-end sticky (30Y 5.24%, 10Y 4.683%) = market pricing structural tariff inflation.

Impact on USD

Mixed — headline cool = dovish; but Nonfuel + tariff pass-through = hawkish counter.
Warsh "supply shocks" thesis fully vindicated on tariff channel.
DXY sideways; short-end prices cut; long-end sticky on tariff inflation.

Impact on US Indices (ES / NQ / YM)

Mixed, lean bearish — tariff pass-through = margin pressure across imports.
NQ mixed — semis/capital goods import prices rising = cost pressure but AI capex intact.
Retailers (XRT, XLY) hit as consumer goods inflation eventually flows through.

Impact on Gold

Bullish — tariff pass-through + Fed cut + stagflation = pure hedge fuel.
Nonfuel Y/Y 4.5% = highest since 2022 signals structural inflation persistence.
Watch $4,300; break above signals structural stagflation breakout.

TLDR

Import & Export Price Indexes (July 2026, released Aug 18):

Import Prices m/m: -0.4% — BEAT, largest decline since May 2025
Import Prices Y/Y: +5.9%
Fuel Imports: -7.2% m/m (petroleum -7.5%, natgas +5.3%)
Fuel Y/Y: +25.2% (petroleum +26.3%, natgas +74.3%)
Nonfuel Imports: +0.4% m/m (tariff pass-through)
Nonfuel Y/Y: +4.5% (LARGEST since June 2022)
Capital goods: +0.9% (semis, machinery, aircraft)
Foods: +0.9%; Automotive: +0.2%
Nonfuel industrial supplies: -0.5%
Export Prices m/m: -1.3%; Y/Y +8.2%
Trump 10-12.5% tariffs Aug 3 pass-through CONFIRMED
Directly contradicts CPI dovish (Core Y/Y 2.5%)
Aligns: PPI Core +0.4%, Empire Prices Paid 58.6, UoM 1-yr 4.3%
Warsh "supply shocks" thesis vindicated
30Y 5.24%, 10Y 4.683% = long-end pricing tariff inflation
Fed cut near-certain but 25bp more likely than 50bp
Next release: September 16, 2026

Import Prices split — Headline -0.4% cool (fuel driven), but Nonfuel +0.4% m/m + Y/Y +4.5% (highest since 2022) = TARIFF PASS-THROUGH CONFIRMED entering supply chain. Capital goods, foods, autos all rising. Warsh "supply shocks" thesis vindicated. Fed cut still near-certain but tariff embedding = 25bp more likely than 50bp. Long-end sticky. Watch Jackson Hole late August, next FOMC Sept 16-17.

_For informational purposes only. Not investment advice._