The proposed tariffs by President-elect Donald Trump are likely to have significant impacts on everyday consumers in the United States.

Possible Price Increases?

Groceries: The average family could see their annual grocery budget increase by about $185, or 3.3%, in 2025 (Trump’s proposed tariffs could raise U.S. grocery prices, analysis finds). This would affect common imported items like coffee, beer, shrimp, beef, bananas, avocados, jam, and olive oil.

Big-box Store Purchases: Families may face an additional $551 per year in costs at stores like Walmart and Target, representing a 14% increase from $3,754 to $4,305.

Household Items:

Overall Economic Impact

  • The average American household could face additional costs of approximately $2,600 annually.
  • When considering broader consequences like retaliatory measures from other nations, this burden could escalate to as much as $7,600 per household.
  • Inflation could potentially increase by one percentage point due to these tariffs.

Disproportionate Effects

  • Low-income households are likely to be more significantly affected, as they allocate a larger portion of their income to items like clothing.
  • The impact on consumer prices could be particularly painful for low-income Americans. To understand how, click here.

Specific Sector Impacts

  • Gas Prices: Higher gas prices are expected, particularly in the Great Lakes states, Midwest, and Rockies, due to potential tariffs on Canadian oil supplies.
  • Construction Costs: House prices could rise due to tariffs on materials imported from Canada, such as cement, minerals, and lumber.
  • Appliances: Prices for washing machines, dishwashers, and other household appliances are likely to increase. Click for more information.

Consumer Behaviour and Market Adjustments

  • Consumers may shift towards domestically produced goods as imported products become more expensive.
  • Some companies, like shoemaker Steve Madden, are already planning to diversify their sourcing away from China to countries like Cambodia, Vietnam, Mexico, and Brazil.

While Trump claims these tariffs will benefit the U.S. economy, economists warn that they are likely to result in higher costs for American consumers across a wide range of products and services.