Besides the traditional holiday shopping season, there might be good reasons to pre-empt some planned purchases between now and January 20, 2025: Price hikes are widely expected to be passed onto U.S. consumers should the incoming Trump administration carry out its plans to impose across-the-board tariffs on imports.
President-elect Donald Trump has said the U.S. will slap a new 25% tariff on imports from Mexico and Canada, along with an additional 10% on on Chinese imports. While campaigning, Trump also mentioned a 10% tariff on all imports and an additional 60% tariff on imports from China.
Of course, no one knows exactly what the final tariffs will be. And before consumers rush to buy essential and non-essential goods, some are warning that retailers are using the threats of tariffs to boost their year-end sales.
Still, analysts and economists are also warning that tariffs are on the way. And based on Trump’s own promises, certain consumer goods are particularly at risk for price hikes.
While the impact on consumer prices would be wide-ranging, cars first come to mind.
GM, Ford and Stellantis, the “Big Three” automakers., rely heavily on Mexico and Canada-based plants to produce vehicles bound for the U.S. market: According to Global Data, about 15% of the 15.6 million new vehicles sold in the U.S. last year came from Mexico, while 8% came from Canada.
Responding to Trump’s announcement, Mexico’s economic minister Marcelo Ebrard noted that 88% of U.S. pickup trucks from the Big Three automakers are imported from Mexico. As a result of the tariffs, he said the average price of a pickup would rise by $3,000 in the U.S.
Wells Fargo analysts, meanwhile, predict that U.S. prices for vehicles entirely produced in Canada and Mexico would increase by $8,000 to $10,000. But U.S.-assembled cars would not be spared, with tariffs expected to lift their prices by an average $2,100.
Electric vehicles (EVs) are also particularly at risk, facing a potential double-whammy of tariff-induced price hikes as well as the end of the Biden administration’s $7,500 federal tax incentive on EV purchases. The combination of the two could lift the average price of an EV by at least 20%.
Aside from automotive products, the National Retail Federation (NRF) is predicting huge increases in consumer prices on laptops and tablets, major household appliances, video game consoles, smartphones, as well as e-bikes.
NRF, based on Trump’s campaign-trail promises of a 10% tariff on all imports, and an additional 60% tariff on imports from China, predicts the price of the average household appliance would increase by 19.4%.
Price hikes would be much larger for laptops and tablets, which would increase by at least 45%, according to the Consumer Technology Association. Similarly, the price of a new video console would go up by nearly 40%. Smartphone prices would be expected to rise by at least 26%.