A line chart shows how globalization affected U.S. inflation from 1987 to 2023. A line shows realized inflation, and another line plots the hypothetical inflation rate, assuming that globalization neither added to nor subtracted from it over that period. A shaded area shows the difference between the two lines. Positive values of the shaded area indicate that impacts from globalization increased inflation, while negative values indicate that it decreased inflation. After NAFTA took effect in 1994 and China’s late 2001 entry into the WTO, globalization mildly moderated U.S. inflation for some time. Its moderating impacts were small, though, compared with the overall inflation level. More recently and unrelated to globalization, inflation increased sharply from 2% before the COVID-19 pandemic to above 8% between 2020 and 2022, and since then has fallen again to around 3%.