NRF: Trump’s tariffs could cause ‘dramatic’ price hikes; slow consumer spending
Donald Trump’s proposed tariffs could result in much higher prices on a wide array of goods — including up to a 29% spike in footwear prices and up to a 31% hike in household appliances — and cost consumers $362 to $624 annually per household,
That’s according to a new report from the National Retail Federation, which said that the increased costs as a result of the proposed tariffs would be too large for U.S. retailers to absorb and would result in “prices higher than many consumers would be willing or able to pay.”
Trump, who will return to the White House next year following his victory in Tuesday's presidential election, has said he would impose a 10% or 20% universal tariff on imports from all countries, and an additional tariff of 60% or even 100% on all imports from China on top of existing tariffs.
“The increases in tariffs resulting from Trump’s proposal would be dramatic,” the study said. “The proposed tariffs would have a significant and detrimental impact on the costs of a wide range of consumer products sold in the United States, particularly on products where China is the major supplier.”
Even accounting for alternative sources of supply and potential new U.S. production, the proposed tariffs on six common product categories (listed below) would reduce American consumers’ spending power by $46 billion to $78 billion — or $362 to $624 per household — every year the tariffs are in place, according to the study.
The cost increases would come at the expense of purchases of other goods and services and represent lost household spending power, the study noted.
“Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices,” stated NRF VP of supply chain and customs policy Jonathan Gold. “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.”
Under the proposed tariffs:
•Consumers would pay $13.9 billion to $24 billion more for apparel;
•$8.8 billion to $14.2 billion more for toys;
•$8.5 billion to $13.1 billion more for furniture;
•$6.4 billion to $10.9 billion more for household appliances;
•$6.4 billion to $10.7 billion more for footwear; and
•$2.2 billion to $3.9 billion more for travel goods.
For all categories examined, total average tariffs would exceed 50% in the extreme tariff scenario, up in most cases from single or low double digits currently, according to the study.
The study was commissioned by NRF and prepared by economic research firm Trade Partnership Worldwide LLC. To read the full study, click here.