What Will Go Up in Price in the US Due to Trump's Tariffs

Americans tired of inflation will soon find themselves paying more for a variety of goods, thanks to President Trump's new trade tariffs, writes CBS News.

Photo: Andrey Popov | Dreamstime.com

The new tariffs were imposed on April 2, a date Trump called "liberation day" because he believes the measures will eliminate trade imbalances between the United States and other countries.

While Trump claims that tariffs are paid by other countries, they are actually paid by American importers like Walmart and Amazon. Because tariffs increase costs for these companies, they tend to pass on some or all of those costs to consumers, raising prices.

On the subject: Trump imposes tariffs on dozens of countries, including an uninhabited island near Australia

The new levies announced by Trump on April 2 include a 10 percent universal tax, as well as “reciprocal tariffs” on more than 60 U.S. trading partners. The levies will be cumulative, meaning imported goods will be subject to both the 10 percent universal tariff and additional levies specific to each country.

Trump said on April 2 that the tariffs would ultimately lower prices for Americans. But economists predict that consumers and businesses will likely actually see higher inflation, making everything from food items like coffee and chocolate more expensive to iPhones and other electronics made outside the U.S.

“For all of President Trump’s talk of a new ‘gilded age,’ these massive tax increases will inevitably raise prices for American families, slow economic growth and business investment, and reduce exports and manufacturing. The tariffs will expose U.S. factories to retaliation abroad and make imported components [which make up about half of all imports] more expensive,” Cato Institute trade experts Scott Lincicome and Colin Grabow said in an email.

They noted: "The level of U.S. tariffs will approach levels not seen since the Smoot-Hawley Tariff Act of 1930, which triggered a global trade war and worsened the Great Depression."

The Trump administration has said some goods will be exempt from tariffs, including semiconductors, pharmaceuticals and critical minerals, although it has said they could be hit with tariffs later.

What goods will become more expensive due to duties

With a 10 percent blanket import duty, every product imported is likely to become more expensive in the coming weeks and months as American companies take the new tariffs into account and adjust their prices.

For example, when Trump imposed tariffs on imported washing machines during his first term, their average price rose by more than 11%, according to a University of Chicago study, increasing the cost of one unit by about $86.

Smartphones and TVs

Among the countries targeted by Trump's tariffs are China, Taiwan and South Korea, which are major exporters of electronics to the U.S., including Apple's iPhones and televisions.

The Trump administration plans to impose a 34% reciprocal tariff on Chinese imports, meaning goods made in China and imported into the U.S. will become more expensive after April 9, when the tariffs go into effect.

Almost all iPhones are still made in China, according to the Council on Foreign Relations, although Apple has moved some production to India. However, the Trump administration on April 2 imposed a 26% tariff on Indian imports as well.

"Apple manufactures almost all of its iPhones in China, and the question is whether there will be exceptions/exemptions from this tariff policy for companies that expand their manufacturing in the U.S.," Wedbush analyst Dan Ives wrote in an April 2 research note.

Cars

In addition to Trump's previously announced 25 percent tariff on auto imports, which went into effect April 3, imported cars will also be subject to a blanket 10 percent tariff. Some U.S.-made cars are equipped with imported parts that will now be subject to the new tariffs, which will increase their cost, experts say.

Ultimately, American consumers will pay an extra $2 to $2500 for the cheapest American-made cars and up to $5000 for some imported models, according to an April 20 estimate from the Anderson Economic Group.

Clothing and footwear

Most of the clothing and footwear sold in American stores like Walmart and Target are made outside the United States, with China, Vietnam and Bangladesh among the largest exporters.

All three countries will face new mutual tariffs: China – 34%, Vietnam – 46%, Bangladesh – 37%.

Wine and spirits

Italian and French wines, as well as Scotch whisky, are likely to become more expensive as imports from the European Union will be subject to a 20% reciprocal duty, while goods made in the UK will be subject to a 10% import levy.

"Tariffs on imported wines will have a knock-on effect across the industry, affecting importers, distributors and consumers," Luis Amoroso, CEO of Full Glass Wine Co., told CBS MoneyWatch.

Amoroso, whose company owns retail wine stores, concluded: “While it’s better than a 200 percent tariff, 20 percent still accumulates throughout the supply chain and can result in a 40 percent or more increase in cost to consumers.”

Furnished

According to CNBC, about 30%-40% of furniture sold in the U.S. is made in other countries. The largest furniture exporters to the U.S. are China and Vietnam.

Coffee and chocolate

The U.S. imports about 80% of its coffee beans from Latin American countries like Brazil and Colombia, according to the U.S. Department of Agriculture. Both countries would be subject to Trump's new tariffs, each at 10%.

Chocolate is another major import from Latin America, as the U.S. climate is generally unsuitable for growing cocoa beans. Among the countries that export cocoa beans to the U.S. are Ivory Coast and Ecuador, according to the U.S. Department of Agriculture. They will be subject to reciprocal tariffs of 21 percent and 10 percent, respectively.

Swiss Watches

Swiss imports to the US will be subject to a new 31% reciprocal tariff, affecting both affordable brands such as Swatch and luxury models made by the likes of Rolex.

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