Donald Trump tariff effect: How your household budget may suffer

Now that he is all set to get back to the White House, it is imperative to evaluate the impact on the market if and when his campaign promises translate into policy.

As a Republican candidate, Trump pledged before the Americans that he would slap 60% tariffs on all goods coming in from China and 10% tariffs on goods imported from all other countries, including India.

While the move could give a much-needed push to the American manufacturing market, the everyday budget of an average US citizen is likely to take a hit as most products will get costlier.

A new analysis by the Tax Policy Center also warned that the proposed tariffs could lower household incomes by an average of nearly $3,000 in 2025, significantly impacting the everyday lives of Americans.

Here are 5 basic items likely to get expensive after Trump’s tariff policy:

Clothing and Footwear

Americans’ wardrobes will take a huge hit as clothing manufacturers will struggle with rising material and production costs. If these proposed tariffs go through, clothing prices in the US skyrocket by 10% to 25% across the board.

This would mean, Americans might have to pay $62.50 for a pair of jeans that used to cost $50, or $125 for shoes that were once $100.

Electronics and Appliances

Electronics giants like LG and Samsung are already adjusting prices to cope with a 20% tax on their first 1.2 million units, followed by a staggering 50% for anything beyond that.

Additionally, the electronics sector can witness a heavy hike particularly due to the rise in prices of components like semiconductors and batteries. Laptops cost up to 45% more, which could mean an additional $357 for average models.

Furniture

The furniture industry faces an impending overhaul due to the new tariff proposals which could push the price of the furniture by 10-30%. The new tariff is for both high-end and normal budget furniture lines.

Solar Panels

Solar panels, already reeling from existing tariffs, might take another hit with Trump’s likely new tariff policies. Currently, tariffs start at a hefty 30% and taper down over time, yet President Biden has opted to extend the 15% tariff for an additional four years.

Automobiles

For anyone in the market for a car, brace yourself for a shock. Proposed tariffs could inflate vehicle prices by thousands of dollars. A staggering 200% tariff on certain automobiles would have far-reaching effects on both new and used car markets. While luxury vehicles may experience the most pronounced increases, even budget-friendly models are unlikely to remain untouched. The cost of getting on the road will only rise, leaving consumers with less choice and more financial strain.