Media: Trump's proposed tariffs could lead to higher consumer prices in US

President-elect Donald Trump's promises of high tariffs on US trading partners, including 25% on imports from Canada and Mexico and an additional 10% on Chinese goods, could have significant economic consequences for American consumers.

The proposed tariffs are expected to raise prices on everyday goods, from fresh produce and lumber to electronics and automobiles, Caliber.Az reports via The Wall Street Journal (WSJ).

Experts warn that the tariffs could lead to price hikes in the short term, just as the US appeared to be making progress on inflation. Economists at Yale’s Budget Lab estimate that the tariffs could increase consumer prices by 0.75% in 2025.

This could result in a loss of over $1,000 in purchasing power per household, with particularly steep price hikes for goods imported from Mexico, Canada, and China. If Trump's proposed tariffs on Chinese imports were added to the existing 60% duties, the inflationary impact could be even greater, further straining household budgets.

The impact of these tariffs is likely to be felt by many businesses. Domestic industries that compete with lower-cost foreign manufacturers might see increased demand, while consumers will face higher costs. The automobile industry is especially vulnerable, with the possibility of a $3,000 increase in the average price of a vehicle, as tariffs would raise the cost of parts imported from Canada and Mexico.

This would hit companies like General Motors, Ford, and Stellantis, all of which rely on supply chains spanning the three countries. Wall Street analysts predict significant reductions in earnings for these carmakers, with GM’s stock dropping nearly 9%.

Farmers, who depend on exports, could also face retaliatory tariffs, while the retail sector anticipates price hikes, particularly on fresh produce. US importers would be charged 25% more for products like Mexican avocados, tomatoes, and tequila, which could affect both the availability and cost of these items in stores.

Consumers are already bracing for these price increases. Kimberly Clausing, an economist at UCLA, notes that businesses may begin stockpiling goods, further driving up prices. Some consumers, like Rochelle Satchell from Florida, are rushing to make purchases before tariffs take effect, fearing the added costs that will follow Trump's inauguration.

While some Trump supporters, like 56-year-old Rafael Garcia, remain confident that his policies will ultimately benefit the country, others, like pet grooming business owner Tara Lee, are concerned about the ripple effects on their businesses. Lee, who purchases supplies from Chinese brands, may have to raise her fees, passing on the higher costs to customers who are already financially strained.

The full impact of these tariffs remains uncertain, but it is clear that many Americans will feel the pinch. As Trump pushes forward with his trade agenda, the balance of winners and losers in the economy could shift, with working-class consumers and industries reliant on imports facing the greatest challenges.

By Aghakazim Guliyev