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U.S. consumers are likely to see price increases if President-elect Donald Trump implements his plan to impose import tariffs, experts said Tuesday on CNBC’s Financial Advisors Summit.
“Either way, there’s a cost to the consumer,” said Erica York, senior economist at the Tax Foundation.
Tariffs are taxes levied on imported goods. Tariffs are paid by U.S. companies that import those goods.
For example, companies could pass on higher prices to consumers in stores to offset the cost of tariffs, experts said.
Mr. York said tariffs would reduce corporate profits, which would reduce returns to shareholders, and could cause companies to suppress wages and job opportunities for workers.
“This is a company-specific decision,” she said.
There is no “guarantee” that prices will not rise.
In an interview with NBC News that aired on December 8, President Trump said he would fulfill his campaign promise to impose tariffs, but said he could not guarantee that American households would not end up paying more because of the tariffs. .
“I can’t guarantee anything,” President Trump said. “We can’t guarantee tomorrow.”
During his first term, President Trump imposed tariffs on washing machines, solar panels, steel, aluminum and various Chinese products. The Biden administration kept many of them in place.
President Trump is seeking to introduce more drastic tariffs during his second term.
During his campaign, he floated the idea of imposing universal tariffs of up to 20% on all trading partners and at least 60% on Chinese goods.
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Such policies would increase costs for the average U.S. household by $3,000 in 2025, according to an October analysis by the Tax Policy Center.
Low- and moderate-income households “may already be living paycheck to paycheck,” said Marianela Corrado, CEO and senior wealth advisor at Tobias Financial Advisors. The economic impact of the tariffs is likely to be the greatest, he said.
Last month, President Trump also pledged to impose 25% tariffs on Canada and Mexico, the United States’ biggest trading partners, if they did not tackle drug trafficking and cross-border immigration.
Uncertainty surrounding President Trump’s tariff plans
However, there is considerable uncertainty about how the tariffs will be implemented, including which countries and products they will target.
York said it is also unclear whether President Trump has the authority to unilaterally impose universal tariffs.
Some market experts are not convinced that President Trump intends to follow through on his promise.
David Zervos, chief market strategist at Jefferies, said on CNBC Summit that his various tariff policies may be a “starter ploy” intended as leverage to “coerce” trading partners during negotiations. said that it was high.
“People are trying to take things literally. [Trump’s] I say it when I know that’s not the way to do it,” Zervos said.
But some are less sure about the outcome.
“I hope they’re really just negotiating tactics,” said Barbara Dolan, CEO and chief investment officer at BD8 Capital Partners. “But maybe not.”
Tariff revenue could be used to offset the cost of tax cuts that Republicans are considering on Capitol Hill.
President Trump also nominated Jamieson Greer to serve as U.S. Trade Representative. Mr. Greer was chief of staff to former Trade Representative Robert Lighthizer, the architect of President Trump’s first-term tariffs.
“I still think it’s a big wild card,” Dolan said of tariffs.
