Tariffs are here—who's really paying the price?
President Donald Trump’s new round of tariffs is beginning to affect American consumers and businesses alike, as a sweeping set of import taxes—ranging from 15% to 50%—takes effect this week. While the administration has framed these moves as wins for US trade sovereignty, the financial impact is already rippling across the economy.
As of Aug. 7, Trump’s “reciprocal tariffs” will apply to most imports from major trading partners, including the European Union, Japan, and South Korea. Canada saw its rate jump to 35% earlier this month, while Mexico was granted a 90-day extension. The Trump administration had originally promised “90 trade deals in 90 days,” but many of the so-called agreements remain vague or nonbinding, with differing interpretations on both sides.
The Yale Budget Lab estimates that the current tariff package will raise prices by 1.8% in the short term, translating to an average loss of $2,400 per household. Analysts note that while the administration touts economic independence, the price increases largely fall on US consumers.
Pressure builds on small businesses
Small businesses, often dependent on overseas materials, are among the first to feel the sting. “Tariffs can make it more expensive for small businesses to purchase imported goods and materials,” according to NerdWallet. “These increased costs can strain cash flow and lead to a decrease in profit margins.”
With companies like Procter & Gamble and Walmart already raising prices in response, the downstream effects are likely to worsen in the coming months, MSNBC reported. Auto giants Ford and GM have also forecast significant losses—Ford alone expects a $2 billion tariff-related hit this year.
Consumers may soon face higher costs for cars, furniture, pharmaceuticals and luxury goods, a report from USA Today noted. European car imports could climb 10% or more, while machinery costs may trickle down to everyday goods over time. Even furniture giants like IKEA, which source largely from Europe and Asia, are expected to pass costs along.
“A few months ago, goods inflation was around zero; now it’s tracking 3%,” Jared Bernstein, former chair of the Council of Economic Advisers, told MSNBC.
No end in sight
Despite growing concerns, Trump has shown no signs of retreat. Many of the announced deals remain in flux, and retaliatory tariffs from China and Canada threaten US exports, particularly in agriculture and manufacturing.
“I wish I had better, more hopeful news. But the fact is we are at the mercy of a president who deeply misunderstands the impacts of his actions in this space and is fully unconstrained by any of the traditional checks and balances,” said Bernstein.
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