U.S. Producer Price Index Drops More Than Expected: Will Trade Tensions Spark New Price Fluctuations?

The U.S. Producer Price Index (PPI) saw a larger-than-expected decline, dropping from 3.7% to 3.2% year-on-year in February, exceeding forecasts of 3.3%.

Meanwhile, U.S. consumer prices rose less than anticipated in February, but this improvement is likely to be temporary due to new tariffs on imports, which are expected to raise the cost of many goods in the coming months.

According to the U.S. Bureau of Labor Statistics, the Consumer Price Index (CPI) rose by 0.2% last month, following a 0.5% increase in January 2025. Over the twelve months ending in February, the index increased by 2.8%, after a 3% jump in January.

In a related development, President Donald Trump sparked a trade war this month by raising tariffs on Chinese goods to 20% and imposing new 25% tariffs on Canadian and Mexican imports. However, Trump eased these measures by offering a one-month exemption for goods meeting origin rules under the U.S.-Mexico-Canada Trade Agreement.

Source: U.S. Bureau of Labor Statistics, U.S. Department of Labor.