“A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter.
This tax ultimately comes out of consumers’ pockets through higher prices.”
During President-elect Trump’s first term in office, his administration imposed tariffs of up to 25% on more than $360 billion in products from China.
Trump has argued that tariffs compel American companies to make goods on U.S. soil rather than purchasing from foreign suppliers.
“We’ll generally raise prices ahead of — we know what the tariffs will be — we generally raise prices ahead of that,” Daniele said.
President-elect Donald Trump is getting ready to take the oval office again. S. . He has proposed import tariffs that retailers who rely on foreign suppliers are willing to pass on to customers, which could result in higher prices for a variety of goods.
The National Retail Federation said in findings released Monday that the new tariffs will cost Americans between $46 billion and $78 billion in annual spending power on items such as clothing, toys, furniture, household appliances, footwear, and travel goods.
In order to provide their customers with a wide range of goods at reasonable costs, retailers mainly depend on imported goods and manufacturing components, according to a statement released by NRF Vice President of Supply Chain and Customs Policy Jonathan Gold. “A tariff is a tax that the U.S. pays. A. importer, not an exporter or a foreign nation. Higher prices are ultimately how this tax is paid for by consumers. “.”.
Trump’s next term could impact the United States in five reasons. A. economy—and the money you have.
According to the industry trade group, a $50 pair of running shoes would increase to $59 to $64 after the tariffs, while a $40 toaster oven would retail for $48 to $52. The NRF stated that a mattress and box spring set that cost $2,000 would cost between $2,128 and $2,190.
Over $360 billion worth of Chinese goods were subject to tariffs of up to 25 percent during President-elect Trump’s first term in office. The White House under President Joe Biden maintained the majority of those tariffs while imposing additional ones on items like Chinese microchips and electric cars.
According to Trump, he intends to tax Chinese goods by 60% and levy a 10–20% tax on the $3 trillion worth of foreign goods that the U.S. imports. S. yearly imports. Because they would primarily be covered by U.S. taxes, such broad tariffs would rekindle inflation. A. In a warning to consumers, Treasury Secretary Janet Yellen expressed a general opinion that is generally held by economists from both political parties.
The nonpartisan Budget Lab at Yale University said in a mid-October analysis that “a consistent theoretical and empirical finding in economics is that domestic consumers and domestic firms bear the burden of a tariff, not the foreign country.”.
Trump said last month at a meeting at the Economic Club of Chicago that “the countries will pay” the tariffs, continuing his repeated claims that foreign corporations would bear the expense. In actuality, American importers reimburse the United States for the tariffs. S. their products when they go across the border, to the Customs and Border Protection agency.
“These policy steps would amount to regressive tax cuts, only partially paid for by regressive tax increases,” according to economists at the Peterson Institute for International Economics. The average middle-income household would pay an additional $1,700 in taxes annually as a result of these changes. In an August policy brief, the nonprofit also said that the proposed tariffs would transfer tax burdens from wealthy Americans to those with lower incomes.
Right now, it’s unclear when the Trump administration might try to raise tariffs. Oxford Economics estimates that any negative effects may not be felt until 2026 because it could take almost a year to complete the legislation needed to raise the levies.
A professor at Harvard University and a previous U. A. Given the possible effects on prices, Treasury Secretary Lawrence Summers questioned the wisdom of imposing import taxes. On Thanksgiving Day, Summers tweeted, “For parents, we’re approaching the holiday season and most of our toys are imported from China.”.
Trump has claimed that tariffs force American businesses to produce their goods in the United States. S. soil as opposed to acquiring goods from overseas vendors.
However, other companies have different plans.
Philip Daniele, CEO of AutoZone, a supplier of auto parts, told Wall Street analysts during an earnings call in late September, “If we receive tariffs, we will pass those tariff costs back to the consumer.”. Daniele stated, “We’ll be raising prices before — we know what the tariffs will be — we usually raise prices before that.”.
Companies with headquarters in China, India, and Germany are among AutoZone’s main suppliers, the company claims.
Donald Allan Jr., CEO of Decker, and Stanley Black. stated last week that since the spring, his tool-making business has been preparing for the potential of higher import duties. Price increases linked to tariffs that we [would] impose on the market would undoubtedly occur right away. “,”.
The idea of bringing manufacturing back to the United States was minimized by Allan. A. claiming that it wouldn’t be economical. According to the executive, the business may be able to “move production and aspects of the supply chain to different parts of the world,” such as from China to other regions of Asia and perhaps Mexico.
According to CEO Walter Johnsen’s October earnings call, Shelton, Connecticut-based Acme United has already made this change, avoiding the tariffs aimed at China by having its Westcott brand products, such as rulers, manufactured in Thailand and the Philippines.
Acme now produces some medical products in Egypt, India, and the United States. A. plants in Washington state, Florida, and North Carolina, the executive stated.
