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From clothes to computers, 6 things expected to get more expensive if Trump's trade plans are enacted
- President-elect Donald Trump has proposed tariffs on imported goods that could raise prices in areas like apparel and technology. Apparel prices would increase by 12.5%, prices for footwear would increase by 18.1%, and travel goods would increase by 13%. Electronics would become more expensive. The proposed tariffs would increase laptop and tablet costs by 45%, smartphone costs by 25.8%, video game consoles by 39%, and televisions by 9%. Major car companies import auto parts from China, Mexico, and Europe. The industry would likely face higher prices under Trump's tariffs, and prices would settle over time. A 10% universal tariff and a 60% tariff on imports from China would increase furniture costs by 6.4%. Prices of appliance pieces like stoves, fridges, dishwashers, and blenders would rise by 19.4%.
- Retailers that source more than 20% of their goods from China, including Crocs and American Eagle, are at higher risk from Trump's tariff proposals. Some retailers have already announced preparations to increase prices should Trump's tariff plans go into effect. The National Retail Federation report estimated that the higher costs would hit low-income households the hardest. Trump has said his proposals would only impact other countries and boost US manufacturing.
- Mary Lovely, a senior fellow at the non-partisan Peterson Institute for International Economics, said it's a possibility that the president-elect will not follow through on the 60% tariff he proposed on the campaign trail. Lovely said it's still unclear how Trump would enact the tariffs, and he could end up going smaller than proposed. There's the question of how much of the tariff burden will fall on consumers, and a lot of it depends on the mechanisms Trump uses to implement the tariffs. Trump's spokesperson Karoline Leavitt said, "President Trump instituted tariffs against China that created jobs, spurred investment, and resulted in no inflation."
- Gold said it's reasonable for both companies and consumers to prepare for higher prices. Consumers are going to be at a burden, but it may take some time for them to feel it, like a slow drip. Lovely said that auto parts are an area where a lot of production is coming from China, so it's "very reasonable" to prepare for price increases. But shifting production would present difficulties because if Trump implements his 10% to 20% universal tariff, you don't really know if there's any safe place.
- The proposed tariffs could increase coffee prices by $0.23, frozen beef prices by $1.09, and olive oil prices by $0.31. Some companies could try to shift their production out of China, but it's not an easy process. Lovely said moving production to countries that are not subjected to US tariffs would take some time for the tariffs to be imposed. Henrik Elm, the CFO for Inter Ikea, told Reuters that Ikea has worked to make its supply chain more responsive to changes.
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