If you’re one of the kajillion who watched the recent presidential debates, you saw Kamala Harris and Donald Trump throwing punch after punch over lots of things, but there’s one that could impact you in a way that you might not have given much thought to before: tariffs.
Tariffs aren't exactly new. In fact, the U.S. has imposed tariffs on countries dating back to 1789. Washington and Lincoln both imposed tariffs, as did Teddy Roosevelt, Trump, and Biden -- even keeping the tariffs Trump levied against China in place.
Now, tariffs are back as both possibility and question mark Trump and Harris are raising in their bid to become POTUS.
“Ultimately the consumer will pay the cost of the tariff, but the point of the tariffs, from the ones that impose them, is centered around the idea of protecting domestic workers and industries and punishing practices that are deemed unfair by foreign entities,” James Vanderloo, a supply chain expert and head of OEC Group’s Milwaukee branch. “That being said, tariffs are becoming less of a partisan debate. It typically is just a matter of what degree the protectionist policy will be implemented.”
Vanderloo notes that the Biden administration tends to use tariffs in a targeted manner while Trump is likely to impose a flat 10% tariff on most goods being imported -- one he claims would protect American manufacturers and put billions in their banks. Harris, however, doesn’t agree. She thinks that tariffs are nothing more than a “sales tax” in a mask, one that American households will be forced to eat.
Now, ConsumerAffairs isn’t in a position – nor wants – to take sides. In all candor, our gig focuses on consumer impact, not international policy. But, if there are tariffs imposed, what could they possibly mean for your wallet? We’ll explain what we found…
If Harris’ take about a tariff effectively being a sales tax is accurate, when tariffs go up, the cost of consumer goods usually goes up too. Pretty much anything you can buy – think electronics, clothes, furniture, appliances, drugs.
It’s kind of like walking into Best Buy or Walmart and finding fewer options than you’re used to. You might have trouble finding your favorite brand or the exact color you want, that kind of thing. And if you’re waiting for a hot new gadget (like a new iPhone) or holding your breath for it to go on sale, tariffs could make it pricier or even cause delays.
What you might pay extra for because of tariffs
Studies show prices can go up by quite a bit – we’re talking a few percentage points to even double digits. One 2019 University of Chicago study found that after tariffs were imposed on washing machines, washer prices increased by $86 per unit and dryer prices increased by $92 each.
Here's a breakdown of what you might pay extra for:
Electronics: Smartphones, laptops, tablets, televisions – anything with a circuit board could see a price hike.
Clothing and Footwear: From t-shirts to jeans, tariffs on textiles can make your wardrobe more expensive.
Furniture and Appliances: Steel and aluminum tariffs can increase the cost of these household staples.
Washing Machines and Dryers: As mentioned earlier, appliances saw a direct price jump after tariffs were imposed.
The global tariff tango
In addition to products in general, consumer-side impact of tariffs varies greatly depending on what countries the U.S. decides to go to the mat with. Here's a glimpse into potential consequences:
U.S.-China Tariff War: China has been a tariff punching bag several times over the last 10 years and if it happened again, it could lead to higher prices for electronics, clothing, furniture, and even agricultural products.
U.S.-Russia Tariff War: The Ukraine-Russia conflict has already raised the price of wheat and, downhill, things like bakery goods, pasta, and beer and that would continue, with a couple of other things added on like fertilizers and energy costs.
U.S.-Mexico Tariff War: This could impact car prices and the cost of fresh produce. Yes, cars. BMW, GM, Audi, KIA, Ford, GM, Honda, Mazda, and others all have Mexican involvement in an automobile’s manufacturing process.
And produce? Tomatoes, lettuce, watermelons, avocados, and strawberries are grown in Mexico, and close to 75% of the asparagus, broccoli, and cucumbers grown in Mexico, are exported to the US.
Meat, too. Let's not forget that Mexico imposed a tariff on the U.S. over the export of pork not too long ago.U.S.-Canada Tariff War: While the U.S. has a lot of trees, Canada has even more, so lumber and construction costs, as well as energy bills, could be affected.
U.S.-Vietnam Tariff War: Clothing and footwear might get more expensive. Ask Nike – it’s got over 100 suppliers there.
U.S.-South Korea Tariff War: Electronics (especially LG and Samsung) and car parts could see price hikes.
U.S.-Europe Tariff War: Even though the EU and the U.S. are usually on pretty friendly terms, Washington hit the Motherland with tariffs just five years ago. The impact there was on products that the U.S. doesn't usually get from other countries like whiskey and airplanes.
The bottom line
Tariffs are a complex issue, but the squeeze they can put on a consumer is pretty clear -- a squeeze that most likely would lead to higher prices, fewer choices, and disruptions in the marketplace.
So, when you hear politicians talking about tariffs, remember it’s not just political jargon and or veiled intimidation. And the next time you’re shopping and getting big-eye’d over the prices, it may not be just the retailer trying to gouge you on prices, either. Global trade battles really could be affecting the prices on the shelves, too.