A new study that examined 150 years of tariffs in the U.S. and abroad found they disrupt the economy and financial markets so much that the result is lower inflation.

The conclusion goes against the conventional wisdom on how import taxes affect prices and comes as President Donald Trump’s tariffs have stirred a growing backlash among Americans who are angry about higher food, utility and insurance costs.

But if the study’s finding are correct, Trump may eventually be able to point to better inflation numbers, assuming he can stomach a weaker economy and labor market.

In a working paper published on Thursday, San Francisco Fed researchers Régis Barnichon and Aayush Singh said higher tariffs lead to reduced economic activity, higher unemployment and lower inflation in the short term.

See Full Page