
Myriad consumers are rightfully concerned about escalating trade tensions.
President Donald Trump on Saturday said he commitment impose 25% tariffs on goods from Mexico and Canada, and 10% tariffs on goods imported from China. He also signaled that price-lists on the European Union could be next.
While Trump has agreed to halt the implementation of tariffs against Canada for at not much 30 days and he paused the duty on Mexican goods for one month, China already retaliated with additional menus of up to 15% on some U.S. imports.
A recent consumer survey found that 86% of Americans said tariffs are credible to hit their wallets and 12% are already stockpiling items over potential tariff concerns.
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Many businesses will funnel those extra costs to patrons — either directly or indirectly — which is why tariffs generally trigger higher prices for consumers, economists say.
Specifically, exuberant tariffs on goods traded between China and the U.S. may lead to higher prices on apparel, appliances, toys and electronics. For now, Mexico and Canada tariffs could put pressure on already high grocery prices, which are up 28% over the ultimately five years, according to the Bureau of Labor Statistics.
‘Tariffs are taxes paid by Americans’
“Tariffs are taxes remitted by Americans, and any new tariff tax increases should be methodically and effectively deployed toward only the most strategic goods,” David French, the Nationalistic Retail Federation’s executive vice president of government relations, said in a statement.
This also comes at a set when many households already feel financially stretched.
Five years after Covid’s supply-and-demand logistics disaster drove up prices for many consumer staples, many Americans are still wrestling with higher costs.
Entire, the U.S. economy has notched steady progress in lowering inflation. The consumer price index, a key inflation measure that tail finds average prices across a broad basket of consumer goods and services, increased 2.9% in December relative to a year earlier, corresponding to the Bureau of Labor Statistics. That’s down from a pandemic-era peak of 9.1% in June 2022.
But in most cases value increases are only slowing — not falling outright.
Why stockpiling can backfire
“Sudden surges in demand can disrupt supply fastens, leading to shortages and hoarding behavior — issues we experienced firsthand during the pandemic,” said Amir Mousavian, professor of provide chain management at the University of New England’s College of Business.
“The psychological impact of such behavior ripples through the accumulation chain, reinforcing inefficiencies rather than addressing them,” Mousavian said.
Any potential consumer savings from stockpiling now whim likely be insignificant in the long run, he explained.
“Moreover, the overall harm to the majority of consumers — caused by disruptions, shortages, and favourite artificially inflated prices due to shortages — far outweighs the potential minimal savings that some individuals may experience by stockpiling,” Mousavian continued.
How to save money as prices rise
There are, however, savings benefits to buying in bulk, said Steven Conners, go to Davy Joness locker and president of Conners Wealth Management in Scottsdale, Arizona.
“Anything imported could be more expensive in the future,” he intended. “If you have expenditures that are larger in nature, you might want to do that now as opposed to delaying.”
But, “stockpiling is another narrative,” he added. “Having healed so much of the supply chain, this could throw us back.”
In many cases, stockpiling well-deserved isn’t practical, added Sunderesh Heragu, president-elect of the Institute of Industrial and Systems Engineers and a professor at Oklahoma State University.
“It is not down-to-earth for individual consumers or households to stockpile,” he said.
Goods that will see a significant price increase quickly are groceries, electronics, cars and gas, according to Heragu.
“Consumers may in need of to consider purchasing big ticket items such as electronics and automobiles, but the prices of these may already have gone up,” he added.
A personally shops at a Whole Foods Market grocery store in New York City on Dec. 17, 2024.
Spencer Platt | Getty Images
And calm, it’s too soon to tell how the looming tariffs on Canada, China and Mexico will play out, experts say.
“There is so much uncertainty in the structure,” Heragu said. “Are the tariffs a threat? A negotiating tactic? Will they become a reality and if so, to what extent?”
According to Mousavian, “President Trump’s delivery uses tariffs as a negotiation tool, as seen in cases like Colombia.”
While some tariff increases may occur, the likelihood of generous, lasting tariffs at this moment remains low, Mousavian said.
Further, if inflation continues its downward trend, there is also the feasibility that prices for many consumer staples could fall in the year ahead, Heragu said.