As we lurch toward the holidays and a second Trump administration, you might seek comfort in a time-honored coping mechanism: shopping. And you could do worse! Given the choice to buy something before or after Trump makes good on his promise to slap fat new tariffs on all foreign imports, the decision seems pretty obvious — might as well get it now.
Clothing and beauty retailers have already warned that Trump’s tariff proposal would jack up prices across the board, even on American-made goods; multiple economic studies have found that it would cost American households an additional $1,900 to $7,600 per year. And economists say that Trump’s policies — including mass deportation — would fuel inflation, hurt foreign relations, and hobble the economy more broadly.
That doesn’t necessarily mean you should start hoarding, though. No one knows exactly what Trump will do, how quickly he’ll do it, or whether it’s mostly bluster. One could also argue that you should focus on saving your money until we have better answers. But are there more concrete ways to prepare, or specific purchases to make now? We talked to several economists and trade experts to find out.
Let’s cut to the chase: Is there anything we should be buying before Trump takes office?
It depends on what your needs are, says Mathilde Bombardini, an economics professor and international trade expert at the University of California, Berkeley. “Can you anticipate certain large purchases? For instance, many appliances and other durable goods come from China, so if you’re going to need a new washing machine, I would say yes, consider buying it now.”
The same goes for electronics such as phones, laptops, and TVs, says economist Gene Grossman, who studies international trade policy at Princeton University. “It wouldn’t be crazy to shift those purchases forward, if you have the ability,” he explains. “A lot of companies may try to stockpile parts and readjust their supply chain to move production out of China, and that’s going to get complicated and expensive.”
Even if you’re in the market for American-made products, you might think about snagging it sooner rather than later, as bigger tariffs will result in higher prices here, too. “If you’re an American car company and your international competitors suddenly have higher prices because of tariffs, you’re going to increase your prices too, because you have less competition from abroad,” says Bombardini. “It’s a simple matter of supply and demand.”
How much time do we have? Could Trump impose tariffs right away?
You don’t need to buy all this stuff immediately, but maybe don’t drag your feet. “When I say it’ll take a while, I mean months, not years,” says Bombardini. “The new administration has pretty broad authority to impose tariffs without going through Congress, so it could happen relatively soon.”
Plus, this time of year is generally the best for big purchases anyway, says Carsten Kowalczyk, a professor of international economics at Tufts University. “The holiday season is when there is strongest competition between retailers. So take advantage of stable prices now.”
Realistically, I’m not going to get a car or a washing machine right now. But how would higher tariffs affect prices of things I buy regularly?
The effects of tariffs on basic necessities like toilet paper, groceries and clothes remains to be seen. “If we’re talking about clothing and toys and smaller items, consumers will probably see higher prices, and they’ll just have to bear it,” says Grossman. “It’s likely to hit lower-income households the hardest.”
More specifically, Trump has proposed a 60 percent tariff on goods from China and up to 20 percent tariffs on goods imported from everywhere else, including major trade partners like the European Union. His argument is that charging higher tariffs on foreign goods could theoretically bolster American manufacturing, boost American jobs, and make it more attractive for Americans to buy domestically made goods. But that’s not really how the economy works, says Kowalczyk. “Today, a lot of supply chains are interconnected,” he explains. “Many U.S. companies use a number of intermediary goods that are produced abroad” — say, a New York–based clothing brand that uses textiles from China — “so these tariffs will create higher costs for domestic products, too, and companies will have to pass those costs along to consumers.”
Plus, 60 percent tariffs on Chinese products won’t move manufacturing jobs back to the United States. “I don’t think we’re the next country up to produce a lot of these manufactured goods,” says Grossman. Instead, we’ll just import more stuff from Vietnam and other parts of Asia, at greater expense. “The price increases will still be noticeable, but less than 60 percent,” he adds. (Lots of Chinese companies have begun shifting production to Vietnam to avoid American tariffs, so there’s a workaround happening already.)
Didn’t Trump impose tariffs during his last term too, though? I didn’t notice major price differences then, at least not before the pandemic.
It’s difficult to track the downstream effects of Trump’s previous trade wars on consumer prices because the pandemic created such upheaval in international supply chains, says Kowalczyk. A report from the U.S. International Trade Commission found that the tariffs Trump imposed in 2018 and 2019 did indeed raise consumer prices for both imported and domestically produced goods; they did not lower prices as Trump claimed they would. But the pandemic had such a nuclear effect on pricing and trade, by comparison, that most people didn’t notice or remember the price increases that happened right before.
What about the argument that higher tariffs will be offset by better trade deals? Who pays tariffs, anyway?
Trump has argued that higher tariffs will force other countries to renegotiate trade deals so that they’re more favorable to the United States. But what’s more probable — and what has happened before — is that the tariffs will be absorbed in other ways, mostly by consumers but also in the quality of goods they’re buying. For instance, if a $40 fragrance suddenly has a 20 percent tariff ($8), its manufacturer would work something out so that the extra cost wouldn’t just show up on the price tag, perhaps by slimming its profit margin (less likely) or changing the product itself so that it’s cheaper to make (more likely). The price of the fragrance would still go up, but not by the full 20 percent. Basically, no one wins.
Even if tariffs do persuade other countries to cut special deals with the U.S., regular Americans won’t see any benefit, says Kowalczyk. Tariffs are an import tax, so the funds go directly to the U.S. government; Trump has claimed that he’ll use that money to replace revenue that would normally come from taxes, which he plans to cut. But if Americans are paying for lower taxes with higher prices in day-to-day goods, that hardly helps anyone. Besides, tariffs go both ways; when the U.S. imposes higher import taxes on trading partners, they tend to retaliate with tariffs on our products too, hampering economies around the globe.
Are there any other shopping choices that you recommend right now?
Every economist I spoke to said that they weren’t changing their shopping habits right now — but they would consider making a big purchase if they were in the market for one anyway, and had the means available. So do with that what you will.
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