Written by Taryn Phaneuf, NerdWallet
As the new Trump administration approaches its “first day,” one of its top policy priorities could have a significant impact on consumers’ wallets.
Based on what is known so far about President-elect Donald Trump’s plan to raise tariffs on all imported goods, U.S. shoppers are likely to see price increases on a wide range of items, including:
Daily necessities such as food, gasoline, and clothing. Luxury items such as home appliances, jewelry, and cosmetics. Big purchases such as a new car or a house. Products manufactured by U.S. manufacturers using imported materials and equipment.
That’s because tariffs are paid by domestic companies that import foreign products and materials, and those companies tend to raise consumer prices to cover higher import costs. After Trump’s victory, U.S. companies selling a wide variety of products acknowledged that they would raise prices if his tariff plan went into effect.
Throughout the Trump campaign, economists sought to quantify the impact of Trump’s proposals on American consumers. Studies predict that costs for U.S. households will increase by thousands of dollars annually. Experts have warned that if the expected rise in prices reignites inflation, the economic impact will go beyond just rising prices and could shake up the entire U.S. economy.
What we know about President Trump’s tariff plans
President Trump’s tariff policy includes an across-the-board increase in import taxes. During his campaign, he said he would impose a tariff of at least 10% on all foreign imports, on top of existing tariffs. It also called for tariffs of at least 60% on imports from China and at least 100% on cars produced in Mexico.
In a Truth Social post in late November, Trump announced that on his first day in office, he planned to sign an executive order imposing 25% tariffs on imports from Canada and Mexico and increasing tariffs on China. . Imports will increase by 10%.
What could be more expensive?
The United States is the world’s largest importer, with the majority of foreign goods coming from China, Mexico and Canada, according to the Office of the U.S. Trade Representative.
Imports into the United States fall into approximately five categories that vary in their visibility to the average consumer. consumer goods. Vehicles including engines and parts. Industrial supplies and materials. and capital goods.
food
The United States imported approximately $196.6 billion worth of food in the first 11 months of 2024, according to monthly data from the U.S. Census Bureau released Jan. 7. Some imported food and beverage items (such as coffee beans, cocoa, sugar, and some fruits) are not locally sourced. Other items are not produced at a sufficient scale to meet current U.S. demand. This means consumers can expect prices to rise for groceries, especially items such as:
Fruits and fruit juices Seafood Bakery products Vegetables Meat products Wine, beer and other alcoholic beverages Edible oils Green coffee Dairy products and eggs Tea and other spices Nuts Sugar Cocoa beans
consumer goods
The list of imported consumer goods is long, including mobile phones, clothing, consumer electronics, toys, sporting goods, electronics, cosmetics, shoes, and cookware, totaling more than $731 billion for most of 2024, accounts for about a quarter of all imports recorded through the United States. November.
U.S. companies that sell imported consumer goods, including Walmart, Elf Beauty, Steve Madden, Columbia Sportswear, and Stanley Black & Decker, said in public comments that they would not be able to sell some products if President Trump’s tariff plan goes through. He said there is a high possibility that prices will increase.
Additionally, research from the Consumer Technology Association predicts that tariffs will increase the prices of laptops, tablets, video game consoles, and smartphones.
car
The United States imported $437.2 billion in vehicles, parts, and engines in the first 11 months of 2024. Passenger cars top the list in this category, but it also includes parts and accessories. This means that in addition to buying a new car, the imported goods needed to maintain and repair the car will also be more expensive.
Like other consumer goods retailers, companies that sell cars and parts plan to pass on the cost of higher tariffs to consumers. And you don’t necessarily have to wait until the import tax hike takes effect. AutoZone CEO Philip Daniele said during an earnings call in September that the company knew how big the tariffs would be and would raise prices in advance. “If a tariff is imposed, the cost of that tariff will be passed on to consumers,” he said.
Industrial supplies/materials
Consumers may not be personally aware of the impact of higher prices on all raw materials. But there are variations that the average American rarely overlooks. It’s crude oil.
That’s because the cost of oil plays a big role in determining the price of gas. The United States is the world’s largest single oil producer, but the oil industry remains dependent on imported oil because America’s aging refineries are not built to match the quality of crude produced domestically. There is. Therefore, with more than $152 billion spent on imported crude oil in the first 11 months of 2024, consumers should expect the tariffs to increase domestic gasoline prices.
» MORE: Can President Trump lower gas prices while president?
As for other products in this category, it is worth noting that consumers are not completely indifferent, even if they are purchased by the producer. For example, increases in the price of materials such as wood, steel, shingles, copper, and other building materials increase costs for the construction industry. That could result in less construction work or make projects more expensive, which could impact the local housing market.
capital goods
Like industrial goods, capital goods are a category of imported goods that are relatively hidden from consumers because they are used in the production of consumer goods and services rather than being purchased by consumers. But that cost is built into everything you buy. Therefore, even if a product is produced domestically, it is possible (and even possible) that the machinery used to manufacture the product may be imported.
The United States imported approximately $876 billion worth of capital goods in 2024, according to November Census year-to-date data. Here are some notable examples:
Computers and computer accessories Telecommunications equipment Semiconductors Medical equipment Civil aircraft (including engines and parts) Agricultural equipment
Taryn Phaneuf writes for NerdWallet. Email: tphaneuf@nerdwallet.com.
The article What Could Be More Expensive Under President Trump’s Tariffs appeared first on NerdWallet.
First published: January 20, 2025, 9:10am EST
