Trump’s proposed tariffs: which consumer products could be affected?

President-elect Trump the campaign to use tariffs as a tool to protect international trade terms that are better suited to bringing in tax revenue, but can affect the prices consumers pay for imported products.

Among the policies that Trump has floated are an across-the-board tariff of 10% or 20% on all goods imported into the US, and a whopping 60% tariff on goods imported from China. He also said he would impose a 25% tariff on Canadian and Mexican goods. At a press conference on Monday, Trump and one of his key Cabinet nominees signaled that they want to use tariffs to secure terms of trade with other countries.

Commerce Secretary-designate Howard Lutnick spoke at a press conference Monday with President-elect Trump and SoftBank CEO Masayoshi Son, who announced that the Japanese-based company will invest $100 billion in the U.S. Lutnick answered a question from the media about the incoming administration’s tax plans. and explained that Trump “has a very clear agenda on taxes, and I think reciprocity is something that will be an important topic for us. The way you treat us is the way you should expect to be treated.”

Trump weighed in and said, “Taxes – used well, which we will do – and reciprocity with other nations, will make our country richer … I always say, for me, tariffs is the best word in the dictionary.”

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The president-elect also pushed back on concerns that tariffs might raise prices for consumers based on what happened in his first term, saying, “I didn’t have inflation and I had big taxes on a lot of things.”

Uncertainty about how the taxes will be applied and the impact of import taxes on consumers will likely continue until the new administration takes office on Jan. 20, 2025, and start moving forward with their preferred policies. Based on some of Trump’s presidential campaign policy proposals, trade experts think there could be a significant price impact on consumers.

“Depending on the nature and extent and how it’s structured, it could be very large,” Clark Packard, a researcher at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies, told FOX Business about the tax’s impact on consumers. values. “He talked in his campaign about a 10% to 20% tariff on all imports, and then he talked about a special tax of like 60% on imports from China. If that goes into effect, you know it’s going to increase consumer prices.”

“I’ve seen research that shows that the price of a laptop, for example, will increase by about $350 and a smartphone will increase by about $200,” said Packard. “That assumes the full passing of the cost of the tax to the retail consumer, but most of the best economic studies show that about 90% of the cost of the tax is returned to the consumer.”

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Imported goods include finished products and intermediate materials used in products completed by American firms. (Photos by Mario Tama/Getty/Getty Images)

Dr. Madhav Durbha, group VP of CPG and manufacturing at RELEX, told FOX Business, “Things like avocados, mangoes, and other fresh products that are widely available in Mexico are very vulnerable to tariffs. Geographical and environmental constraints make it difficult to change production , and these costs can directly translate into higher prices for consumers at grocery stores.”

Durbha added that the US imports pharmaceutical ingredients used in the production of everyday medicines from China and that a tax on such imports “would increase the cost of drugs to consumers and disrupt supply chains, creating disruptive effects on the entire health care industry.”

He said that although many brands of clothing and footwear have adopted the “China plus one” strategy of decentralizing production to countries such as Vietnam and Cambodia, China’s tariffs could increase the cost of those goods to consumers.

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President-elect Donald Trump delivers remarks alongside SoftBank Chairman and CEO Masayoshi Son, at Mar-a-Lago in Palm Beach, Fla., on Monday, December 16. (Reuters/Brian Snyder/Reuters)

Durbha added that a similar role was played by consumer electronics, such as laptops and smartphones, which may be subject to price increases or supply delays despite increased production from China to countries such as India and Vietnam.

Packard also noted that the imposition of tariffs on imported goods will also affect American manufacturers and exporters, because foreign countries may impose retaliatory tariffs on US exports without responding.

He explained that “40% to 50% of all imports are intermediate goods that American firms use to make their products competitive with the rest of the world, so if you start raising the price of goods that American firms buy from abroad, you will make the finished product uncompetitive.” less in global markets.”

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“If you impose taxes, you’re going to see retaliation from foreign governments,” Packard explained. “So not only are you a manufacturer in the US and your prices have gone up because the goods you need have gone up in price, you’re going to see higher tariffs when you go to export.”