Recent research shows that President-elect Donald Trump’s tariff proposals could cost American consumers.
A report earlier this month from the National Retail Federation (NRF) showed that Americans could lose between $46 billion and $78 billion in spending power every year if the proposed levies on imports to the U.S. go into effect.
The study looked at how the tariffs — 10% to 20% on imports from all foreign countries and an additional 60-100% tariff on imports specifically from China — would affect the price of apparel, toys, furniture, household appliances, footwear and travel goods.
“Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices,” NRF Vice President of Supply Chain and Customs Policy Jonathan Gold said in a news release.
“A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers’ pockets through higher prices.”
Although the tariffs could benefit some American manufacturers, the NRF said, the revenue gains for U.S. companies and the government wouldn’t outweigh losses to consumers.
For example, the release added, a $40 toaster oven could cost up to $12 more after the tariffs. A $50 pair of athletic shoes would climb to $59-$64 and a $2,000 mattress and box spring set would wind up costing $2,128-$2,190.
“Within each category, higher prices and loss of spending power would hit low-income families especially hard,” the NRF said.
The report also noted that the increased costs resulting from the tariffs would be too much for U.S. retailers to absorb and lead to prices higher than many American consumers would be willing — or even able — to pay.
Earlier this month, John David Rainey, Walmart’s chief financial officer, warned that his company — the largest retailer in the country — would most likely have to increase its prices on some products if the tariffs became a reality.
“We never want to raise prices,” Rainey told CNBC. “Our model is everyday low prices. But there probably will be cases where prices will go up for consumers.”
Rainey said it is too soon to tell which products would cost more under the tariffs.
And as PYMNTS wrote last week, consumers are already feeling stretched, with the popularity of buy now, pay later (BNPL) options suggesting Americans are keeping their finances top of mind ahead of Thanksgiving, Black Friday and the year-end holidays.
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