- President-elect Donald Trump’s proposed tariffs could have a significant impact on the cost of consumer products produced in China and sold in the United States, according to new research from National Retail Federation (NRF).
- If these new tariffs are enacted when Trump takes office next year, consumers’ spending power could decrease by $46-78 billion every year the tariffs are in place across six categories – apparel, toys, furniture, household appliances, footwear and travel goods, the report found.
- The increased costs would be too large for U.S. retailers to absorb, according to NRF, which would in turn drive up prices on the cost of goods.
As retailers head into 2025, many are relying on new technologies and personalization to insure success. The change of leadership and these potential new tariffs could impact how brands shift their spending on marketing, as they manage price increases and consumer spending.
According to the NRF’s research, which was conducted in association with Trade Partnership Worldwide, the cost of goods made in China could go up in several ways. First, a universal tariff of 10-20% on all imports into the United States from all countries (Scenario A), and secondly an additional tariff of 60-100% on all imports from China on top of existing tariffs (Scenario B). In this extreme Scenario B, the cost of goods could go up by 50%.
From a consumer spent point of view, this translates to consumers paying $13.9-24 billion more for apparel, $8.8-14.2 billion more for toys, $8.5-13.1 billion more for furniture, $6.4-10.9 billion more for household appliances, $6.4-10.7 billion more for footwear and $2.2-3.9 billion more for travel goods.
“Despite accounting for just 7% of total U.S. imports, the proposed tariffs on these six consumer goods categories alone would reduce U.S. spending power by up to $78 billion annually,” read the report.
