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Anyone watching the news following the presidential election has heard one word associated with President-elect Donald Trump more than any other: tariffs. Tariffs are taxes levied upon foreign goods imported to America from other countries, and throughout his campaign to retake the White House, and even more so after his win, Trump has promised to impose heavy tariffs on the outside world.
As reported by the National Retail Federation (NRF), Trump has declared that he will impose a universal tariff of approximately 10% to 20% on all imports from all foreign countries, except China which will specifically receive an additional 60% to 100% tariff.
Some American manufacturers could benefit from foreign businesses receiving the tariffs; however, many consumers could be negatively impacted: tariffs upon foreign manufacturers force those companies to raise their prices. That, in turn, forces the American companies who purchase those products to raise their prices to offset the newly increased costs.
That leaves the American consumer paying far more than what they’re used to.
That kind of price increase for American shoppers is what happened in 2019, when prices on large home appliances (such as washing machines, dryers and dishwashers) all spiked due to Trump imposing tariffs on foreign manufacturers. In a recent study, the NRF has predicted that a similar price surge will occur in 2025 if Trump’s proposed tariffs go through.
Per the study, Americans would pay between $13.9 billion to $24 billion more than normal for clothing and $6.4 billion to $10.7 billion more in footwear. The home appliances that notoriously spiked in the last Trump administration would cost consumers $6.4 to $10.9 billion more in price increases.
The most shocking item on the list was toys, which would be impacted with a 55.8% price hike, costing shoppers $8.8 billion to $14.2 billion more in costs, all because the tariffs “would be too large for U.S. retailers to absorb,” and costs would be passed down to shoppers.
Overall, if Trump’s tariffs are implemented as he has described them, the NRF predicts that the spending power of American consumers could decrease every year by $46 billion to $78 billion until the tariffs are discontinued.
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Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
