America's economic balance seems to be on shaky ground as discussions around tariffs and tax increases flood the political arena. President-elect Donald Trump has laid out plans to impose substantial tariffs on imports from countries like Mexico, Canada, and China. According to economic analysts, this move could lead to significant price hikes for everyday consumer goods, impacting everything from appliances to electronics and even gasoline.
Trump has suggested imposing a sweeping 25% tariff on all products imported from Mexico and Canada. On top of this, he's hinted at introducing a 10% tax on various Chinese products. Both actions are being framed as strategies to slow down illegal immigration and combat the inflow of drugs. But the reality is far more complex.
Tariffs, by their nature, are taxes levied on imported goods, and experts warn they inevitably lead to increased prices for consumers. "A barrage of new duties on foreign imports would likely boost consumer costs on everything from vacuum cleaners to tiki torches," noted Scott Lincicome, trade expert at the Cato Institute. Therefore, consumers can expect to pay more at the checkout line if these tariffs go live.
The Consumer Technology Association projected the tariffs could reduce Americans' spending power by $90 billion. This number reflects predicted price surges for popular electronics. Observers noted laptops and tablets could see the steepest hikes—up to 45%—with smartphones and gaming consoles likely experiencing double-digit percentage increases as well. "If I am a consumer thinking about something I would want to buy next year and know price might go up, I'd want to buy it sooner rather than later," noted Ed Brzytwa, vice president of international trade at the association.
Footwear constitutes another affected sector. Nearly all footwear available on U.S. shelves is imported, with China being the primary supplier. According to the Footwear Distributors and Retailers of America, 99% of the shoes sold come from overseas. The group’s CEO expressed concerns, stating, "If they apply tariffs on Chinese goods and Chinese footwear, it will hit working families the hardest," highlighting the trickle-down effect of such tariffs on average households.
Retailers are already bracing for price adjustments. Companies like Jolie, which produces filtered shower heads, warned their customers about impending hikes if tariffs come to fruition. On their website, they alerted customers to purchase now if they wish to lock in current prices, sigifying how the potential rise is influencing consumer behavior.
Even the home furnishings giant IKEA commented on the impending tariffs, stating they would struggle to keep prices affordable. The company’s CEO, Jesper Brodin, indicated the tariffs could undermine their efforts to maintain low prices—an important aspect of their business model.
Gasoline prices are expected to rise significantly as well. A 25% tariff on Canadian crude oil, which heavily feeds U.S. refineries, could lead to gas prices increasing by up to 70 cents per gallon. Patrick De Haan, head of petroleum analysis at GasBuddy, cautioned, "For the inland regions, it could be problematic for what they pay at the pump," admitting the tariffs might make gas much more expensive for Americans.
Although some economic leaders have downplayed the inflationary impacts, skepticism remains rampant. Trump's circle argues previous tariffs had little-to-no effect on inflation, and cite potential benefits such as job protection and increased federal revenue. But the truth is these tariffs are known to be burdensome for the average consumer.
The proposed tax increases don’t stop at tariffs. An energy profits levy introduced by the UK government on North Sea oil and gas profits—a situation mirrored on this side of the pond—has become another contentious point. According to critics, increasing tax on this resource could hamper investment and lead to job losses. It’s being compared to “killing the goose laying the golden egg,” as jobs reliant on the oil and gas sector could vanish.
