Here's what Trump's tariffs mean for consumers right now

As every American consumer must know by now, President-elect Donald Trump has promised to impose import tariffs on products entering the United States from Mexico, Canada and China starting on his first day in office.

A tariff is a tax, and most economists expect consumers will ultimately foot at least part of the bill.

In a recent University of Chicago survey, more than 90% of economists agreed that consumers bear “a significant portion” of import tariffs.

Of course, consumers have questions: Which products will cost more? When will prices rise? Should I hurry up and buy stuff now?

Here are some answers.

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Which products cost more?

Economists and retailers say import tariffs on China, Mexico and Canada could drive up prices for American consumers on a dizzying array of products.

Which? If you’re sitting there with a pen and paper hoping to make a list, don’t bother.

“That would be a very long list,” said Robert Handfield, a professor of supply chain management at North Carolina State University.

“Clothing and shoes are almost exclusively made in China and Mexico. Computers and electronics are also manufactured in China and Mexico,” he said. “Almost all the toys people buy for Christmas are made in China.”

The National Retail Federation alone has identified more than 500 clothing items whose prices could rise due to tariffs.

USA TODAY has written about dozens of foods potentially affected by tariffs.

But some consumer goods are more likely to face tariffs than others, said James Knightley, chief international affairs economist at ING.

Knightley predicts the Trump administration will focus its trade negotiations on high-value, high-tech goods such as cars, major appliances and computer chips. He said these products are linked to jobs with higher wages or national security concerns.

However, not all economists agree that a new round of tariffs will inevitably drive up consumer prices.

“The data doesn’t support that,” said Jeffrey Roach, chief economist at LPL Financial.

Roach points out that Trump imposed tariffs in his first term as president. During these years, the annual inflation rate peaked at a modest 2.9%.

When will prices rise?

Gradually, then suddenly.

This is a quote from “The Sun Also Rises,” the classic novel by Ernest Hemingway. Tim Quinlan, senior economist at Wells Fargo, believes that’s true here.

Mere talk of tariffs will prompt some consumers to buy expensive items or hoard smaller items in the belief that prices will soon rise. This behavior alone could lead to a price increase.

If Trump announces tariffs on his first day in office, as he has suggested, some prices could immediately skyrocket.

“Prices at the pump would immediately go up,” Handfield said. Tariffs on Canada would increase the price of Canadian oil. The oil market will adapt quickly, said the economist.

Car prices could also react quickly to the Trump tariffs. Many American vehicles and parts come from Mexico.

“Once these tariffs are implemented, auto dealers will likely increase their prices,” Handfield said.

Tariffs on other goods may not affect prices for many months.

Consider steel and aluminum. If Trump wanted new tariffs on these products, the Commerce Department would launch an investigation that could take up to 270 days, according to a Wells Fargo analysis. After that, the president has 90 days to analyze the results and 15 days to implement the policy.

When Trump imposed tariffs on steel, aluminum and other goods in his first term, “it took several months to implement,” Quinlan said.

Even after the new tariffs go into effect, they would not apply to items already in American warehouses. Retailers could spend months selling off this inventory.

They could try to raise prices on those goods, Knightley said, but “consumer groups will be watching for price gouging.”

Should I hurry up and buy stuff now?

If you drive to Walmart and want to fill your trunk with toothpaste and soap, no one is going to stop you.

But trade experts say it’s unrealistic to think that American consumers can stock up now on every product that could become more expensive next year because of tariffs.

“In general, it’s just not practical,” Quinlan said.

And some items, like perishable foods, aren’t really suitable for hoarding.

“How many peppers and avocados can I keep in my fridge?” Quinlan asked.

However, the answer to this question is not a hard “no”.

Maybe you need a new car. Maybe the car you have now is on its last legs. Cars are expensive. Tariffs could drive up prices.

“So if you’re thinking about buying or leasing a car, it would probably be a good idea to do it before January,” Handfield said.

The same rule could apply to expensive consumer goods such as washers and dryers, refrigerators and air conditioners, many of which are made in Mexico.

“If you’re looking for a washing machine anyway, why not buy it now,” Knightley said. “Get the Black Friday discount on top.”

Of course, loading up on consumer goods before Trump imposes tariffs assumes that the tariffs will cause prices to rise. Roach and others don’t think that will happen.

Here’s what Trump’s tariffs mean for consumers right now

ByAmelia Journalton

By Amelia Journalton

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