While there’s a lot we don’t know about President-elect Donald Trump’s tariff plans, at least one thing is pretty certain: Tariffs will go up. If history is any indication, that means price increases will likely follow.
Already, Trump announced he will slap a new 25% across-the-board tariff on imports from Mexico and Canada as well as an additional 10% tariff on Chinese imports the very day he’s inaugurated.
And on the campaign trail, he pledged to levy a 60% tariff on all goods imported from China and a 10% to 20% tariff on goods coming from all other nations.
Such tariffs have the potential to significantly increase the prices consumers pay on nearly everything that isn’t made entirely in the US, of which there are very few goods.
So you may be wondering, especially with all the Black Friday and Cyber Monday deals taking place, are there any purchases you can make now to save money down the road?
The answer is yes — with caveats.
What are tariffs?
Tariffs are a tax on imports. Governments often impose them to protect national security, bolster domestic businesses and raise revenue.
But they can be expensive for consumers, as businesses often pass along higher costs.
In total, the typical middle-income US household could be stuck shelling out more than $2,600 extra a year if a blanket 20% tariff on all imports and a 60% tariff on imports from China are imposed, according to research from the Peterson Institute for International Economics.
Take, for instance, avocados. In 2022, 90% of the avocados Americans consumed were imported. Of the avocados imported into the US, 89% came from Mexico. So if Trump imposes a 25% tariff on Mexican imports, that guac and avocado toast you probably already think is really expensive will only get more expensive.
The caveats
Stockpiling comes with its own risks. You can only buy so many avocados before they go bad, for example. And it’s an open question whether Trump will soften his approach to tariffs.
We also don’t know how long any tariffs he’s contemplating would be in effect, whether certain items would be excluded, as was the case with many of his first-term tariffs or if new tariffs would be rolled out in phases rather than all at once.
As a result, many things might not actually get more expensive, said Scott Lincicome, vice president of general economics and trade at the libertarian-leaning Cato Institute.
And as we witnessed during the pandemic, “stockpiling by consumers can actually lead to higher prices in and of themselves and empty store shelves,” he said. Plus, any money put toward stockpiling means you’ll have less to spend in other areas.
That said, here are five items that are likely to get more expensive with any new tariffs Trump imposes that may make sense to purchase before he takes office.
Major household appliances
A 10% tariff on all imports and an additional 60% tariff on imports from China would boost the price of the average household appliance by 19.4%, assuming retailers fully pass on the additional cost to consumers. That’s according to an analysis the National Retail Federation, a trade group representing retailers, commissioned.
A basic refrigerator would go from around $650 to $776.
That doesn’t mean you should rush to buy one now. But if you need a new one – or will soon – now’s a good time to consider buying.
“In retrospect, if you were in dire need of a washer and dryer in 2017, I would have said, ‘Buy that sucker right now; don’t wait because next year it’s gonna be 20% more,’” Lincicome said, looking back on a 20% tariff on imported washing machines Trump put in place in 2018.
Laptops and tablets
Many consumer electronics excluded from current tariffs are unlikely to escape blanket tariffs, said Ed Brzytwa, vice president of international trade at the Consumer Technology Association, a trade group.
A 10% across-the-board import tariff plus the additional 60% on Chinese goods could result in a 45% increase in the consumer prices for laptops and tablets, according to an analysis published last month that CTA commissioned. On average, that would mean consumers pay $357 more for laptops and $201 for tablets.
But a 25% tariff on Mexican imports would likely push those prices even higher given how many electronics are manufactured there, CTA told CNN.
“Higher tariffs on our closest allies and trading partners like Canada and Mexico are counterproductive and will only lead to harm to US businesses and consumers,” CTA president Gary Shapiro said in a statement on Wednesday.
“There’s very little in the consumer electronics space that is not imported,” Best Buy CEO Corie Barry said on the company’s earnings call earlier this week. “The customer ends up bearing some of the cost of the tariffs. These are goods that people need, and higher prices are not helpful.”
Video game consoles
The price of a new gaming console could go up by nearly 40%, just taking into account the 10% tariff on all imports and an additional 60% on Chinese goods, the CTA estimated. That would bring the average price of a gaming console up by $246.
That’s primarily because China is the major supplier of consoles, accounting for 87% of US video game console imports last year, according to the CTA-commissioned report. Few alternatives exist for moving production, the authors wrote. And tapping the few alternatives comes at a steep cost.
Smartphones
CTA’s report estimates the price of a new smartphone would rise by 26% to $213 and would likely go even higher if there’s a 25% blanket tariff on imports from Canada and Mexico. Similar to consoles, very few smartphones are manufactured in the US. China currently accounts for 78% of US total imports, according to the report.
Moving smartphone production to other countries, including the US, where very few are currently made, could push prices up substantially.
E-bikes
One item that tops the list of things that could get spendier under Trump’s tariffs is e-bikes, Lincicome told CNN. “I could be somewhat confident that you’re going to see some consumer pain.”
That’s because most e-bikes sold in the US are mainly coming from China and are already subject to tariffs, he said. On top of which, “It’s not like Donald Trump is a big fan of going green and e-bikes.”
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CNN.com
