Trump voiced his latest tariff threats on Tuesday, as consumers and businesses alike brace for impact on their wallets. Prior to taking office, Trump’s proposed tariff plans included a 10% blanket tariff on all imports, a 60% tariff on Chinese goods, and 25% tariffs on imports from Mexico and Canada. While some argue these measures could eventually boost domestic manufacturing, the immediate impact on consumer prices is likely to be significant. Let’s take a look at how these proposed trade measures could affect prices—particularly on big-ticket items—so you can make informed purchasing decisions in the coming months.
How Trump tariffs will impact your wallet
When the government imposes a tariff on imported goods, it essentially acts as a tax paid by the importing company. However, these companies rarely absorb these additional costs themselves. Instead, they typically pass them along the supply chain, ultimately reaching the end consumer.
Ben Johnston, Chief Operating Officer of Kapitus, an online business lender, explains the ripple effect: “Higher tariffs will certainly cause prices to rise for U.S. consumers, as tariffs drive up the cost of the product being imported and these costs must be passed on to the customer. This will not only spur inflation but will lower overall consumption, slowing the economy.”
Large purchases like automobiles, appliances, and electronics are likely to see some of the most noticeable price increases, according to Johnston. These items often rely heavily on global supply chains and imported components. Even products assembled in the United States frequently depend on imported parts, meaning tariffs could affect prices even for “American-made” goods.
Johnston notes that no industry is likely to be hit harder by an increase in import duties than the retail sector. He highlights how approximately 11% of all consumer spending goes to purchase imported goods, “but the percentage retail sales made up of imported goods is much higher.”
What consumers should do now
Given these impending changes, you might want to consider making major purchases before the anticipated price hikes. However, at the end of the day, your personal finances matter much more for these kinds of buying decisions than trying to speculate on the market. Rather than trying to anticipate the ripple effect of Trump tariffs, you’re better off turning to price-tracking tools and staying on top of what you need. And if you were already in the market for a big-ticket item—think washing machine, laptop, or car—consider pulling the trigger sooner rather than later.
