The word “tariff”—a type of tax applied to imports—has caught fire once again.
No surprise. After employing them in his first presidential term, President-elect Donald Trump has already communicated the possibility of imposing tariffs of 60%-100% on Chinese goods, and even a universal tariff of 10%-20% on most imports from other countries.
The reason these taxes are getting so much buzz is because tariffs, which are designed to protect domestic industries, can greatly affect the prices of commonplace items you buy—and not for the better.
Indeed, today we’re going to look at a number of items that could become more expensive for American consumers if these proposed tariffs are put into place. We’ll also dive a bit deeper into how tariffs work, as well as the pros and cons associated with them.
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How Tariffs Work
As mentioned above, a tariff is an additional tax on goods and/or services imported from another country.
Congress’ ability to impose tariffs comes from its constitutionally given power to “to regulate commerce with foreign nations, and among the several states.” Though in more modern times, Congress has ceded some of that power to the executive branch, and now the president can raise tariffs in certain situations—including if other countries have been engaging in unfair trading practices or if imported goods are harming critical domestic industries.
There’s more than one type of tariff, though the most common kind is ad valorem, in which the tax is set as a fixed percentage of the value of the important. So, say a car is imported into the U.S. with a value of $60,000, and that car is subject to a 10% tariff—poof!—the tariff would add a $6,000 charge. There are other kinds, too, such as tariff-rate quotas (tariffs begin or increase once a predetermined import threshold has been crossed) or specific tariffs (fixed dollar amount per specific item—say, $3 per bicycle).
So, who foots the bill? It’s not the foreign company producing the goods, nor the producing company’s country. Tariffs are paid by the importing company to its home country’s government—and most economists agree that the bulk of that expense ultimately trickles down to consumers. In America specifically, low-income consumers are hit the hardest.
Pros + Cons of Tariffs
Tariffs have a number of positives for the importing country:
- Any product brought in generates revenue for the country.
- They can compel citizens to buy domestically produced products over foreign alternatives.
- They can compel businesses to produce more domestically and even “re-shore” jobs that are currently overseas.
- They can be used as a political negotiating chip.
In the U.S., political parties from both parties have advocated for tariffs (specifically for Chinese imports) in recent years, though Trump’s proposals are far wider-ranging and more extreme in size than pretty much anything other politicians have suggested.
But tariffs can have significant drawbacks, too, including:
- They can depress trade.
- They can lead to retaliation from abroad.
- They can result in higher prices for consumers.
That last point is of the most interest to everyday Americans—and a real threat from Trump’s proposed tariffs.
“If business owners are even somewhat rational, you will pay some, if not all of the additional cost,” says Mark Malek, CIO at Siebert Financial. “That, my dear friends, is inflation in its rawest form.”
Malek isn’t alone in this sentiment. A September 2024 survey by the University of Chicago asked a group of elite economists whether they agree or disagree with the statement “Imposing tariffs results in a substantial portion of the tariffs being borne by consumers of the country that enacts the tariffs, through price increases.” The results:
- Strongly Agree: 43%
- Agree: 52%
- Uncertain: 2%
- Disagree: 2%
- Strongly Disagree: 0%
- No Opinion: 0%
Also, other countries have found ways to get around tariffs, even if just temporarily. For instance, in 2023, the Department of Commerce issued a final determination stating that Chinese solar cell and module producers shipped their solar products through other countries to evade tariffs.
Which Items Are Likeliest to Avoid the Tariff Effect?
Domestically oriented companies tend to be insulated from tariffs. In other words, if an item is made in America and its components are predominantly produced from within the United States, tariffs should have little to no effect on the cost to produce the item, and thus shouldn’t result in a price increase for consumers.
Companies within competitive markets will also be hesitant to raise prices, lest they lose business to more affordable alternatives. “In more competitive markets like energy commodities, tariffs are more likely to be borne by companies,” say Glenmede strategists.
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Which Items Could Become Much More Expensive With Tariffs?
Only time will tell which proposed tariffs will be put into place, and it’ll take even more time to see whether, and by how much, those tariffs affect U.S. prices.
But assuming any proposed tariffs are enacted, higher prices are likely on the way. And if several tariffs are levied, Americans could be in for sticker shock. Says the Peterson Institute for International Economics:
“We find that imposing a 20 percent across-the-board tariff combined with a 60 percent tariff on China would cost a typical U.S. household in the middle of the income distribution more than $2,600 a year.”
But certain items would be more of a drag than others. Here, we look at several items that could become much more costly in the U.S. if proposed tariffs become reality.
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1. Electronics
Are you overdue for a new laptop or smartphone?
According to a 2024 report commissioned by the Consumer Technology Association and undertaken by the Trader Partnership Worldwide LLC, proposed tariffs could result in substantial price increases for American consumers. Estimated increases are as follows:
- Smartphones: +26%
- Video game consoles: +40%
- Laptops and tablets: +46%
“The research also shows that the 60% flat tariff on all imports from China will largely drive production to other countries, not to the United States,” the report states.
Even American technology firms are heavily reliant on foreign suppliers. For instance, American-domiciled suppliers account for just 23% of Apple’s supply chain.
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2. Walmart Products
Walmart is a global powerhouse—the largest retailer on the planet, in fact, operating in 24 countries. But it’s also known as one of the most affordable one-stop shops for frugal Americans.
Its supply chain is a different story. Fewer than half (49%) of Walmart’s suppliers are domiciled in the U.S., and about 21% are in China and India alone.
It’s unlikely that Walmart will instantly cut out all foreign suppliers—instead, it’s likely to pay more for imports. But don’t expect it to eat all of the costs. John David Rainey, Walmart’s chief financial officer, told CNBC that “We never want to raise prices … so we want to work with suppliers and with our own private brand assortment to try to bring down prices,” but admitted that “there probably will be cases where prices will go up for consumers.”
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3. Vehicles
Higher tariffs could make cars, trucks, SUVs, and other vehicles more expensive.
Trump has suggested an exorbitantly high tariff on Chinese auto imports from Mexico. At a town hall event in Flint, Michigan, in reference to vehicles imported from Mexico, Trump stated, “We’re going to charge them—I’m telling you right now—I’m putting a 200% tariff on, which means they are unsellable in the United States.” For context, vehicles assembled in Mexico and Canada represent nearly a quarter of all vehicles sold in the U.S.
Additionally, blanket tariffs on certain country’s imports could affect the prices of predominantly American-made vehicles, too. For example, Ford’s third-largest supplier, Magna International, is a Canadian company. It supplies Ford with billions of dollars worth of scrap aluminum every year. If a 10% tariff is placed on Canadian aluminum, Ford vehicles would become more expensive to make, and there is a healthy chance some of those costs will be passed on to consumers.
Wells Fargo, in an analyst note, said tariffs on parts from Mexico, Canada, and China could raise the price per vehicle by $600 to $2,500.
Lastly, higher China tariffs could keep cheaper Chinese electric vehicles, such as BYD and Nio, away from the American market. Vehicles from other countries, such as BMWs from Germany could also become more expensive.
In other words, it doesn’t matter if you prefer foreign or American-made vehicles. Your price might go up either way.
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4. Toys
Christmas 2025 could be a rough one for parents if threatened tariffs become reality. Barbies, tricycles, board games—these and many other toys could skyrocket in price.
A November 2024 report prepared by Trade Partnership Worldwide for the National Retail Federation (NRF) suggests that:
- In the event of a 10% universal tariff and 60% tariff on Chinese imports, total average tariffs on toys would be around 56% and U.S. consumer prices would rise by 36%.
- In the event of a 20% universal tariff and 100% tariff on Chinese imports, total average tariffs on toys would be a little above 97% and U.S. consumer prices would rise by nearly 56%.
Eventually, these tariffs could spur a slight increase in U.S. toy production, but it’s estimated that they would have a net negative impact on the U.S. economy.
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5. Household Appliances
Remodeling your kitchen soon? If that involves replacing appliances such as your refrigerator, blender, and toaster, that refresh could soon be even pricier!
The aforementioned NRF report states that household appliance costs could increase by 19% or 31% based on 10% universal/60% Chinese or 20% universal/100% Chinese tariff scenarios.
For instance, a simple refrigerator costing $650 could end up with a price tag as high as $776 to $852.
Much like with toys, while U.S. appliance manufacturers would be better off, costs for American families could rise by a painful degree.
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6. Clothing
Many Americans have already turned to thrift stores and online secondhand shops to save money on clothing purchases. In other words: There’s not much room to absorb still-higher clothing prices.
Unfortunately, apparel—ranging from shirts and underwear to ski suits and swimwear—is another category of goods that the NFR expects to rise in cost should tariffs take hold.
The tariffs we currently have in place for apparel average 14.7%. That rate could rise from between 37.5% and 56% on average, depending on the tariffs imposed and the country of origin.
That would result in U.S. consumer prices swelling by 12.5% to 20.6%, meaning an $80 pair of men’s jeans would jump to between $90 and $96.
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7. Rare Earth Metals
Rare earth metals, also referred to as rare earth elements, are lustrous, soft heavy metals that have a wide variety of uses, including in smartphones, LED bulbs, catalytic converters, even nuclear reactor control rods.
The U.S. often gets rare earth metals from other countries, meaning the proposed tariffs could heavily raise the price of metals.
“For non-competitive markets like rare earth metals, tariffs are more likely to be passed on to consumers,” explains the Glenmede Investment Strategy Team.
“[DPR Construction Supply Chain Leader Tim Jed] said that if things like rare earth metals aren’t punished as much as finished materials, that could mean the raw materials themselves could be shipped to a third nation to be assembled, which would be less than importing something directly from China, for instance,” Bisnow reports. “But if not, that would raise the price of magnets, metals, glass, ceramics, batteries and electronics.”
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8. Avocados
Bad news for avocado toast lovers: About 90% of the avocados Americans consume are imported. They come almost exclusively from Mexico. Considering Trump has mentioned the possibility of a 25% blanket tariff on Mexican imports, that could make your guacamole more pricey.
Also, a lot of other fresh foods would become pricier, too. Data from the USDA shows that between 2007 and 2021, 60% of fresh fruit and 38% of fresh vegetables (excluding potatoes, mushrooms, and sweet potatoes) were imported.
Saving money on groceries is a priority for many Americans, and soon, that might become even trickier.
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