How Trump’s Tariffs Will Impact Consumers

On April 2, all eyes will be on President Donald Trump as he reveals his plans for what he has labeled “Liberation Day.” This announcement is expected to unveil an extensive series of reciprocal tariffs, which would impose taxes on imported goods at the same rate that U.S. exports are taxed.

Trump asserts that these tariffs will boost domestic employment and encourage companies to return operations to the U.S. However, experts warn that such policies may disrupt current trade relationships and lead to significant costs for American consumers.

“This marks the beginning of what could escalate into a global trade conflict. In the end, it might not be about ‘America first,’ but rather ‘America alone,’” stated Şebnem Kalemli-Özcan, an economics professor at Brown University, in an interview with TIME. “Other nations may hesitate to engage in trade or business with the U.S.”

Generally, companies facing tariffs tend to pass those costs onto consumers. For instance, the prices of electronics could rise by approximately 10% due to existing tariffs, as highlighted by Budget Lab. Now, a broader range of products, from clothing to wine, may also see increased costs.

Research indicates that low- and middle-income families will bear the most significant burden of these tariffs. Experts emphasize that many households may struggle to absorb the shock of rising prices.

The impending tariffs follow Trump’s signing of a presidential memorandum in February aimed at ensuring fairness in U.S. trade practices. “We are moving away from a history of being taken advantage of. This initiative will prioritize the American worker, enhance our industrial competitiveness, reduce the trade deficit, and strengthen both our economic and national security,” reads a fact sheet from the White House. These trade measures are also part of a larger strategy by the Administration to generate funds to offset tax breaks for the wealthiest Americans.

However, relying solely on tariffs will not resolve the trade deficit, according to Kalemli-Özcan. She argues that tariffs could isolate U.S. companies, cutting them off from foreign innovations and technological advancements. Without supportive policies for domestic manufacturing, industries may face significant disruptions. “Establishing an entirely new industry and scaling it to meet U.S. consumer demand could take a decade,” she explains. “By that time, the economy could be sluggish due to the stifling of economic dynamics.”

While the precise details of the new reciprocal tariffs remain unclear, there are several ways they could impact everyday consumers.

Before the new tariffs are even announced, China, the largest trading partner of the U.S., is already facing a 20% tariff, up from the original 10% imposed earlier in February. During his campaign, Trump hinted at a potential tariff exceeding 60% on all imports from China. According to estimates from the Committee for a Responsible Federal Budget, such a tax could lead to a significant reduction in U.S. revenue, as it might slash imports from China by around 85%. Given that China is the primary supplier of goods to the U.S.—including phones, computers, and electric batteries—this could lead to increased prices for these items.

In retaliation, China has imposed a 15% tax on American agricultural products such as chicken and wheat, while tariffs of 10% are being applied to soybeans, pork, and fruits. Additionally, several U.S. companies have reportedly been barred from operating in China, according to the New York Times. These actions threaten the livelihood of American farmers, as local suppliers in China may seek alternatives to U.S. imports. “The U.S. does not hold all the leverage in this scenario,” Kalemli-Özcan notes. Chinese traders can easily turn to other countries for their fruit and poultry needs, while American farmers may struggle to find new buyers.