Peter Kramer/NBC via Getty Images
U.S. consumers could see price increases if President-elect Trump goes ahead with his plan to impose import tariffs, experts told CNBC on Tuesday Financial Advisor Summit.
“Either way, consumers will pay a price,” said Erica York, senior economist at the Tax Foundation.
Tariffs are taxes levied on imported goods. Duties are paid by U.S. companies that import these goods.
For example, experts say companies could pass on higher prices to consumers in-store to offset the cost of tariffs.
York said tariffs could also reduce corporate profits, thereby lowering shareholder returns, and could prompt companies to drive down wages or employment opportunities for workers.
“This is a company-specific decision,” she said.
There is no “guarantee” that prices will not rise
Trump said in an NBC News interview aired on Dec. 8 that he would fulfill his campaign promise to impose tariffs, but said he would not There’s no guarantee that American households won’t pay more as a result of tariffs.
Trump: ‘I can’t guarantee anything’ explain. “I can’t promise tomorrow.”
For example, Trump imposed tariffs on washing machines, solar panels, steel, aluminum and a range of Chinese goods during his first term. Biden administration reserve Many of them are intact.
Trump has called for a more comprehensive tariff regime in his second term.
During the campaign, he floated the idea of imposing universal tariffs of up to 20% on all trading partners and at least 60% on Chinese goods.
Such a policy would increase costs for the average American household by $3,000 by 2025, according to an October report. analyze By Tax Policy Center.
Marianella Corrado, CEO and senior wealth advisor at Tobias Financial Advisors, said lower- and middle-income households “who may already be living paycheck to paycheck” are likely to see the greatest financial impact from the tariffs.
In November, Trump also promised to impose 25% tariffs on Canada and Mexico—U.S. largest Trading partners – if they don’t address drug trafficking and cross-border migration.
Uncertainty over Trump’s tariff plan
However, there is considerable uncertainty over how the tariffs will be implemented, including which countries and products will be targeted.
York said it was unclear whether Trump had the authority to unilaterally impose general tariffs.
Some market experts don’t believe Trump will follow through on his promises.
David Zervos, chief market strategist at Jefferies, told CNBC Summit that his various tariff policies are likely an “opening tactic” designed to “coerce” trading partners during negotiations chips.
“People try to take[Trump’s]words literally when we know that’s not how he behaves,” Zervos said.
Others, however, are less sure of the results.
“I would hope … that they are really just negotiating tactics,” said Barbara Doran, chief executive and chief investment officer of BD8 Capital Partners. “But they may not be.”
Tariff revenue could be used to help offset the cost of tax cuts that Republicans are considering on Capitol Hill.
Trump also nominated Jamison Greer as his U.S. trade representative; Greer was the chief of staff to Trump’s former U.S. Trade Representative Robert Lighthizer. architect Tariffs during Trump’s first term.
“I think it’s still a big variable,” Dolan said of the tariffs.
About The Author
