BOSTON — President Trump delayed steep 25% tariffs on Canada and Mexico for 30 days after both countries agreed to boost security along their borders with the U.S.
Canada and Mexico are the United States’ two largest and closest trading partners. In a social media post, the president said he was pleased with the initial progress, but cautioned any extension of the 30-day pause could depend on whether long-term economic deals can be struck with the two countries.
Most trade organizations and consumer advocates warn tariffs will increase prices for Americans as companies importing goods to the U.S. pass the added costs on to buyers. But there’s disagreement about how much prices will increase, whether companies will attempt to absorb a percentage of the costs, and how long the tariffs may last.
The National Retail Federation, the world’s largest retail trade association, published a report in November that considered the potential impacts of increased tariffs under the Trump administration. The report looked specifically at a 10-20% across-the-board tariff increase on U.S. trade partners, and a 60-100% tariff increase on China.
“Across the board, we saw the tariffs would result in price increases,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.
The report found the typical American family would see its household costs rise anywhere from $2,500 to $7,600 a year, Gold said.
The report looked at prices across six categories: Apparel, Toys, Furniture, Household Appliances, Footwear, and Travel Goods.
In the apparel category, a pair of men’s jeans currently priced at $80 could increase to $96, according to the NRF’s report. Footwear prices could jump by up to 29%, meaning a $90 pair of shoes today would cost up to $116.
A new fridge, currently priced at $650 could increase to more than $850 — an increase of 31%.
A separate study conducted by the Consumer Technology Association looked at the impacts on electronics, like smartphones and laptops. It found a $826 smartphone today could cost more than $1,100 under Pres. Trump’s proposed tariffs. Likewise, a laptop priced at $793 could see it’s cost jump by hundreds of dollars to $1,333, a potential 68% increase.
The National Association of Home Builders warned 25% tariffs on lumber and other building materials from Canada would raise the cost of home construction and remodeling, particularly at a time when mortgage rates are already high.
“Tariffs on lumber and other building materials increase the cost of construction and discourage new development, and consumers end up paying for the tariffs in the form of higher home prices,” NAHB chair Carl Harris said in a statement Monday morning. “NAHB urges the administration to reconsider this action on tariffs, and we will continue to work with policymakers to eliminate barriers that make housing more costly and prevent builders from boosting housing production.”
While the numbers are concerning, consumer advocates are urging shoppers to stay calm and not rush any major purchases.
“There’s nothing I would rush to buy,” says savings expert Clark Howard. “Various industries are putting in the worst-case scenarios as sort of the backdoor way to lobby against tariffs on the items they sell.”
Experts say panic-buying out of fear of higher prices could accelerate price increases, lead to product shortages, and potentially result in consumer’s making unnecessary and expensive purchases they may regret. It remains unknown if the tariffs will take effect on Canada and Mexico, or how long they may last if they do take effect. Last week, Pres. Trump threatened – and then reversed course – on 25% tariffs on Colombia in the span of 24 hours.
“Basically, everybody needs to take a chill pill right now,” Howard said.
This is a developing story. Check back for updates as more information becomes available.
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