President-elect Donald Trump’s plan to levy import tariffs could have significant implications for U.S. consumers, according to experts who spoke at CNBC’s Financial Advisor Summit. Erica York, senior economist at the Tax Foundation, emphasized that there would be a cost to consumers regardless of the outcome.
Tariffs, which are taxes placed on imported goods, are paid by U.S. companies that import those goods. This could lead to businesses passing on higher prices to consumers in order to offset the cost of tariffs. In addition, tariffs may reduce business profits, potentially affecting returns for shareholders and impacting wages or employment opportunities for workers.
In a recent NBC News interview, Trump acknowledged that he could not guarantee that U.S. households wouldn’t pay more as a result of tariffs. During his first term, Trump imposed tariffs on a variety of products, and he has proposed a more extensive tariff regime for his second term, including universal tariffs of up to 20% on all trade partners and at least 60% on Chinese goods.
An analysis by the Tax Policy Center estimated that such a policy could raise costs by $3,000 for the average U.S. household in 2025. Low- and middle-income households, who are already living paycheck to paycheck, would likely bear the brunt of the financial impact from tariffs.
There is uncertainty surrounding how tariffs might be implemented, including the specific countries and products that would be targeted. It is also unclear whether Trump has the authority to unilaterally impose universal tariffs. Some experts believe that Trump’s tariff policies are strategic negotiation tactics rather than concrete plans, while others are less certain.
Tariff revenue may be used to offset the cost of a tax-cut package that Republicans are considering. Trump’s nomination of Jamieson Greer as U.S. trade representative, a former chief of staff to Robert Lighthizer, who played a key role in implementing tariffs during Trump’s first term, adds to the uncertainty surrounding the future of tariffs.
Overall, the impact of Trump’s tariff plan remains a significant unknown, with experts and market analysts closely monitoring developments to understand the potential implications for consumers, businesses, and the economy.
