WASHINGTON – If you’re planning to buy a big-ticket item like a refrigerator, smartphone, or car, now might be the perfect time to act as experts warn that President-elect Trump’s proposed tariffs could soon lead to higher prices on imported goods.
On Monday, Trump sent shockwaves across the nation’s northern and southern borders, vowing sweeping new tariffs on Mexico, Canada, as well as China, as soon as he takes office as part of his effort to crack down on illegal immigration and drugs.
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In a pair of posts on his Truth Social site, he said he would impose a 25% tax on all products entering the country from Canada and Mexico, and an additional 10% tariff on goods from China, as one of his first executive orders.
Sean Freeder, a political science professor at the University of North Florida, said the potential price hikes could feel identical to inflation, but they aren’t the same. He added that when it comes to making a big purchase on items like a new car, electronics, or things with “a lot of metal in it,” he’d pull the trigger “sooner rather than later.”
“Big purchases, I would potentially move up,” Freeder said. “I don’t think that Trump can back entirely off of tariffs, so even if economists managed to convince him this is not something that he wants to do, I don’t think that he can fully back off that.”
Freeder adds that Americans may also pay a big price.
“Importers that take those products and bring them into the U.S., they pay those tariffs, but they also don’t really pay the tariffs,” he explained. “They pass a lot of that extra money on to the consumer. So in short, you might see some pretty significant increases in consumer goods.”
Conversely, Jim Mirabella, who is a professor of Statistics and Operations Management at Jacksonville University, expects Trump’s tariffs to encourage U.S. companies to build more products in America. He hopes the tariffs will put a stop to American dependence on Chinese goods.
“Yes, prices will go up initially, because suddenly we’re making stuff in the United States,” Mirabella said. “Again, we’re not getting stuff from China. But as I said, people will be earning more money, people will be spending more money, and everything should come down over probably a year...I think it’s a great idea.”
Forestry products and lumber are among Canada’s greatest experts and their prices may increase as well. Agricultural products from Mexico, like avocados, peppers, strawberries lemons, and broccoli are also subject to a potential price increase.
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Economists are generally skeptical, considering tariffs to be a mostly inefficient way for governments to raise money. They are especially alarmed by Trump’s latest proposed tariffs.
Carl B. Weinberg and Rubeela Farooqi, economists with High Frequency Economics said Tuesday that energy, automobiles and food supplies will be particularly hit hard.
“Imposing tariffs on trade flows into the United States without first preparing alternative sources for the goods and services affected will raise the price of imported items at once,” Weinberg and Farooqi wrote. ”Since many of these goods are consumer goods, households will be made poorer.”
High Frequency Economics believes the threats are not meant to support new trade policy and are instead a tool to elicit some changes along the borders and for imports from Canada, Mexico and China.
Though Vice President Kamala Harris criticized Trump’s tariff threats as unserious during her failed bid for the presidency, the Biden-Harris administration retained the taxes the Trump administration imposed on $360 billion in Chinese goods. And it imposed a 100% tariff on Chinese electric vehicles.
Indeed, the United States in recent years has gradually retreated from its post-World War II role of promoting global free trade and lower tariffs. That shift has been a response to the loss of U.S. manufacturing jobs, widely attributed to unfettered trade and an increasingly aggressive China.