Steeper tariffs mean you’ll likely see higher prices from the grocery aisle to your next car repair. Economists say consumers foot the bill from these kind of trade actions and stress the far-reaching impacts that Trump’s latest tariffs will have on goods sourced from around the world.
— President Donald Trump has unveiled his latest tariffs, and they could have significant implications for your wallet.
Trump’s sweeping new tariffs, on top of previous levies and retaliation worldwide, are expected to increase prices for everyday items. The trade wars have already roiled financial markets and plunged businesses into uncertainty — all while economists warn of potentially weakened economic growth and heightened inequality.
Which impacts will be felt by consumers and workers first? And what can households do in the face of so much uncertainty? Here’s what you need to know:What are tariffs and how will they affect me?
Tariffs are taxes on goods imported from other countries. Companies buying foreign products pay the tariffs imposed on them — and, as a result, face higher costs that are typically passed on to customers.
Trump has argued tariffs will protect U.S. industries from unfair foreign competition and raise money for the federal government. But since so much of what we buy today relies on a global supply chain, steeper tariffs mean you’ll likely see more expensive prices from the grocery aisle to your next car repair.
“It is going to affect everything in the economy,” said Josh Stillwagon, an associate professor of economics and chair of the Economics Division at Babson College. “There’s this immediate price increase that’s going to be passed on to consumers here, basically as soon as the retailers have to buy new product.”Will the tariffs affect everyone equally?
No. Experts warn that these tariffs could escalate inequities. Low-income families in particular will feel the costs of key necessities, like food and energy, rise with fewer savings to draw on — significantly straining budgets.
Low-income households often “spend a larger share of their income on essential goods — whether it’s food or other basic products … (like) soap or toothpaste,” said Gustavo Flores-Macías, a professor of government and public policy at Cornell University whose research focuses on economic development. Because of this, he said, “even relatively small price increases” will have disproportionate impacts.
Evidence of that disparity will only mount for big-ticket items. Dipanjan Chatterjee, vice president and principal analyst at Forrester, points to now-imposed auto tariffs, explaining that projected price hikes of thousands of dollars for a new imported car will be easier for those with larger salaries to absorb.
“That tax is more severe for people who earn less money,” said Chatterjee. “So it’s a regressive tax.”What about jobs?
Beyond more immediate price pressures, experts also warn that tariffs could contribute to unemployment or lower incomes down the road.
