As the holiday season approaches, many consumers may be considering upgrading major household items like refrigerators, smartphones, and even cars, Newsweek reports.
With the prospect of sweeping tariffs introduced by President-elect Donald Trump, now could be the best time to make these big-ticket purchases before prices potentially rise.
During his campaign, Trump pledged to implement a 60% tariff on Chinese imports and a 10-20% tariff on goods from other countries, with a specific warning of a 25% tariff on Mexican goods if the country doesn’t comply with US immigration policies. While Trump insists that these tariffs will not raise consumer prices and will incentivize more American manufacturing, concerns remain among economists who warn that the increased costs could be passed on to consumers. Despite these concerns, Trump maintains that the move will ultimately benefit the US economy by encouraging fairer trade agreements and boosting domestic production.
The US imports over $4 trillion in goods and services annually, with China accounting for a significant portion of these imports. If Trump’s proposed tariffs are implemented, the National Retail Federation (NRF) estimates that American consumers could lose anywhere between $46 billion and $78 billion in spending power each year due to higher prices on imported goods. According to NRF Vice President Jonathan Gold, tariffs are essentially a tax on consumers, as higher costs are likely to be passed down through the supply chain, impacting retail prices across various sectors.
Despite this, retailers are still anticipating strong sales growth this holiday season. The NRF projects a record number of shoppers—183.4 million—will participate in the Black Friday through Cyber Monday sales, and retail sales in November and December are expected to grow by 2.5% to 3.5% compared to last year. While the economy is expected to continue growing, there’s no denying that certain products, particularly those reliant on imports, could see significant price hikes.
Electronics, such as smartphones, laptops, and gaming consoles, are likely to be heavily affected by tariffs, especially those imported from China. Smartphones alone accounted for 10% of the US’s imported goods last year, with over 80% of these devices being manufactured in China. Under the proposed 60% tariff, prices for smartphones, such as the iPhone, could rise by as much as 30%. Laptops, tablets, and other electronics could see price increases ranging from 25% to 45%, making it an advantageous time for consumers to purchase these items before the tariffs take effect.
Experts suggest that students or individuals who need new computers for work or school may want to act now, as the potential for higher prices is a real concern. Electronics, including audio-visual equipment and small appliances, have a high reliance on global trade, particularly with China and Mexico. As these items could see considerable price hikes, now might be the right moment to lock in current prices before any tariffs take hold.
Home appliances, from refrigerators and washing machines to stoves and blenders, are also expected to experience price increases if the tariffs are enacted. These goods often depend on parts or manufacturing from China, meaning that American consumers could face 20% higher prices on some of these household staples. The NRF estimates that consumers could pay anywhere from $6.4 billion to $10.9 billion more for appliances due to increased costs from the tariffs.
Mary Lovely, an expert at the Peterson Institute for International Economics, explained that many kitchen and home renovation products, including cabinets and appliances, are sourced from China, and US manufacturers will face higher prices as a result. The potential for higher prices is especially significant for those looking to renovate or replace major home appliances, as the tariffs would create a “double whammy” effect. In addition to tariffs on finished goods, the tariffs on materials like steel and aluminum would drive up costs for components used in appliance manufacturing.
Beyond electronics and home appliances, a wide range of other products are likely to experience price hikes due to the proposed tariffs. Cars, particularly those that are gasoline-powered (as electric vehicles are exempt), could become more expensive, with the NRF projecting an increase of up to $13.1 billion in costs for American consumers. Clothing, toys, and furniture are also expected to be hit, with projected increases ranging from $8.5 billion to $24 billion.
These price hikes could have a ripple effect throughout the economy, further contributing to inflationary pressures. With companies facing higher import taxes, many will pass those costs on to consumers. As a result, shoppers might find themselves paying more for everyday items at big-box retailers like Target or Walmart, which could be especially tough for budget-conscious buyers.
Retailers are already feeling the strain of rising costs, with some, such as Target, reporting lower-than-expected stock values due to increased cost pressures and ongoing supply chain challenges. Despite these hurdles, the NRF expects strong holiday sales, though consumers may find it wise to prioritize purchases now to lock in current prices before the tariffs are fully implemented.
