While the president-elect Donald Trump promised he would set tariffs, they are going to raise the prices on most of the consumer goods within the United States. Import tariffs on Mexico and Canada and probably China, assuming they materialize, may have wide-ranging implications throughout the economy and among major retailers such as Walmart, Target, Costco, and Dollar Tree. Discussed below are some things that could get costlier and what could be expected of them.
Overview of Trump’s proposed tariffs
Trump’s tariffs on all merchandise originating from Mexico and Canada at a rate of 25%, and 10% imports from China as also stated in this article, Trump threatens to impose sweeping new tariffs on Mexico, Canada and China – These are the items that will suffer the most when he…, claimed to offer a solution to urgent issues like illicit immigration and the smuggling of drugs. However, experts caution that the actual effect may be paid by American buyers as the cost of basic commodities rise.
Classes of goods likely to see increase in prices
Consumer electronics
Setting up, consumer electronics rank among the most vulnerable industries from these tariffs. Major retailers like Best Buy have made it known that they would have to raise the prices of many electronic devices if these tariffs go into effect.
- Laptops and tablets: The Consumer Technology Association says this could rise as high as 45% on the prices for laptops and tablets.
- Smartphones and video game consoles: This is another sector that would see possible double-digit increases in prices, averaging $213 more for each smartphone due to the tariffs.
Given the fact that roughly 60% of consumer electronics are imported, mostly from China, any new tariffs would most likely be directly passed onto consumers.
Clothing and footwear
Apparel prices will also increase by quite a margin like the foodstuffs. The National Retail Federation predicted that one could see more than a 20% increase in clothing prices.
- Apparel and footwear: Nearly 99% of the shoes sold in the U.S. are imported, over half of which are from China. Analysts expect that shoe tariffs will hurt low-income families the hardest, as these families spend a higher percentage of their income on clothing.
Home goods and appliances
There are also hikes in prices to make a swallow into appliances and furniture in the household. Most of their productions have been in Mexico or China.
- Appliances: Products such as washing machines, dishwashers, and refrigerators may see a price surge, considering even retailers such as Lowe’s have voiced concerns over increased costs from imposed tariffs.
- General merchandise: Walmart has noted that two-thirds of its merchandise originates from the United States; however, other imports may lead to a higher price for the consumers if there are tariffs. This means the basic commodities upon which families survive.
Food products
Food prices could suffer a setback as Trump piles on his tariffs. So much of the produce used in the U.S., like avocados and tomatoes, crosses the border courtesy of Mexico.
- Wholesale grocery prices: Wholesaler Analysts anticipate an increase in grocery prices due to the fact that the tariffs on agricultural import costs will be passed on by the producers. Roughly US$88 billion of agricultural products are imported from Mexico and Canada by the U.S.
Games, toys and novelties
Other commodities for which considerable increases in prices are envisioned in the new tariff regime include toys.
- Toys: Prices may leap upwards by as much as 36% to 56%, taking a chunk out of holiday shopping budgets across America.
Retailer’s response and consumer impact
Large retailers like Walmart and Target have already started having conversations with suppliers about potential price changes because of these tariffs. Walmart’s chief financial officer has said the company wants to keep prices as low as possible, but he suggests some increases may be necessary if tariffs are put in place.
The broader economic impact will be the reduction in consumer spending power; it is speculated to cost American households an estimated $90 billion in increased expenditures for the various product categories.
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