President-elect Donald Trump’s proposed across-the-board tariffs could amount to a tax on your Christmas gifts next holiday season.
A new report by the National Retail Federation (NRF) says that the Trump tariffs could result in upwards of $78 billion in annual price increases for consumer products in six product categories: apparel, footwear, furniture, household appliances, travel goods, and toys.
According to the NRF, the price of a $25 board game could increase to as much as $39 after tariffs and a $100 coat could cost as much as $121.
Per household, that could mean increased costs of $362 to $624 for these six product categories alone.
The Tariffs Trump Wants
Trump has long expressed an affinity for tariffs. On the campaign trail, he proposed a baseline 10 to 20 percent tariff on imports from all countries — and much higher tariffs on two of the largest U.S. trade partners: China and Mexico.
The president-elect has called for a 60 percent minimum tariff on goods imported from China, with the potential to increase to as high as 100 percent. He has also threatened punitive tariffs of up to 75 percent on imports from Mexico — if the country fails to curb the flow of migrants into the United States from the southern border.
The president-elect has promoted tariffs as a way to counter the unfair trade practices of countries like China and revive domestic manufacturing — a pursuit some, including former Sen. Phil Gramm, view as counterproductive.
Tariffs Are a Sales Tax on Consumers
Tariffs, a charge on goods imported into a country, are generally incorporated into the retail price of goods by retailers. Consumers ultimately pay the cost for higher tariffs, not foreign manufacturers or local retailers.
In practical terms, estimates that Trump’s proposed tariffs would lead to the following price increases:
- An $80 pair of men’s jeans could rise to $96
- A $50 tricycle could cost $78
- A $17 plush toy could reach $27
- A $650 refrigerator could climb to $852
- $90 sneakers could increase to $116
A Yale Budget Lab study published in October assesses that the Trump tariffs could result in total annual consumer price increases of $7,600 per household.
Leading economists, including former Treasury Secretary Larry Summers, warn that Trump’s tariff plan and other proposed domestic and economic policies are likely to cause inflation to spike again and slow economic growth.
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