What to Buy Before Trump’s Tariffs Take Effect
Trump made his latest tariff threats on Tuesday as consumers and businesses alike brace for the impact on their pocketbooks. Before taking office, Trump’s proposed tariff plans included a blanket tariff of 10% on all imports, a 60% tariff on Chinese goods and 25% tariffs on imports from Mexico and Canada. While some argue that these measures could eventually boost domestic production, the immediate impact on consumer prices is likely to be significant. Let’s take a look at how the proposed trade measures could impact prices, especially on big-ticket items, so you can make informed purchasing decisions in the coming months.
How Trump’s Tariffs Will Impact Your Wallet
When a government imposes a tariff on imported goods, it essentially acts as a tax paid by the importing company. However, these companies rarely bear these additional costs themselves. Instead, they typically pass them along the supply chain, eventually reaching the end consumer.
Ben Johnston, chief operating officer of Kapitus , an online business lender, explains the ripple effect: “Higher tariffs will certainly lead to higher prices for US consumers because tariffs increase the cost of the imported product, and these costs must be passed on to consumers . This will not only drive up inflation, but will also reduce overall consumption, slowing the economy.”
Larger purchases such as cars, appliances and electronics are likely to see the most noticeable price increases, Johnston said. These products often rely heavily on global supply chains and imported components. Even products assembled in the United States often rely on imported components, meaning tariffs can affect prices even for “American-made” products.
Johnston notes that no industry is likely to be hit harder by higher import tariffs than the retail sector. He points out that approximately 11% of all consumer spending is spent on imported goods, “but the share of retail sales made up of imported goods is much higher.”
What consumers should do now
Given these looming changes, you may want to consider making large purchases before the expected price increases. However, at the end of the day, your personal finances matter much more to these types of purchasing decisions than trying to speculate in the market. Instead of trying to anticipate the ripple effect of Trump’s tariffs, you’re better off turning to price tracking tools and staying on top of what you need. And if you’re already in the market for a big-ticket item—like a washing machine, laptop, or car—consider pulling the trigger sooner rather than later.