The Big Ticket Items to Consider Buying Before Trump's Tariffs Kick In
Published Nov 25, 2024 at 5:00 AM ESTUpdated Nov 25, 2024 at 9:16 AM EST
By Katherine Fung
Senior Writer
If your refrigerator is on the fritz, or your iPhone is starting to do the thing where it doesn't hold a charge, this holiday season might be the time to trade up — before the sweeping tariffs proposed by President-elect Donald Trump could go into effect next year.
On the campaign trail, Trump promised to implement a 60 percent blanket tariff on Chinese goods, and a 10 to 20 percent tariff on imports from all other trading partners. He also warned that he'd be willing to put a 25 percent tariff on Mexican goods if the country doesn't cooperate with his immigration plans.
The president-elect has claimed that the massive trade escalation wouldn't impact consumer prices and would tax other countries while boosting American manufacturing. Most economists, including Republicans, disagree and say tariffs tend to get passed on in the form of higher prices for consumers.
"Shoppers eyeing big-ticket items this Black Friday should consider moving quickly, especially with potential tariffs looming that could potentially raise prices," Chip Lupo, a writer and analyst at WalletHub, told Newsweek. "Electronics, appliances, cars, and furniture are particularly vulnerable to price increases because of their reliance on imported parts and materials."
This past year, the U.S. imported $4 trillion in goods and services, according to the U.S. Census Bureau. Of that total, $433 billion came from China. If Trump's proposed tariffs go into effect, the National Retail Federation (NRF) estimates that American consumers could lose between $46 billion and $78 billion in spending power each year.
Photo-illustration by Newsweek/Getty"A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers' pockets through higher prices," Jonathan Gold, NRF's vice president of supply chain and customs policy, said in a press release earlier this mont
Raymond Robertson, the director of Texas A&M University's Mosbacher Institute for Trade, Economics, and Public Policy, told Newsweek that "people don't get that" tariffs and taxes are essentially the same thing.
"Tariffs are taxes. Taxes make prices go up," Robertson said. "I'm just so stunned that people don't put two and two together."
Despite consumer confusion and mixed signals from the market, NRF still expects steady sales growth for the holiday season. The world's largest retail trade association expects a record 183.4 million people to shop in store and online from Thanksgiving Day through Cyber Monday. The NRF also forecasts retail sales in November and December to grow between 2.5 percent and 3.5 percent from last year, amounting to an increase of $979.5 billion to $989 billion.
"For budget-conscious consumers, the advice is clear: prioritize purchasing now if you're in the market for items like stoves, smartphones, or cars," Lupo said. "With Black Friday deals in play, locking in lower prices before new tariffs take effect is a smart move. Waiting might result in sticker shock once tariffs are implemented and retailers are forced to adjust their pricing to accommodate higher import costs."
Here's are the big-ticket items to pay attention to as the holidays roll around:
Electronics: iPhones, laptops, tablets, cameras, headphones, video gamesSmartphones account for about a tenth of the goods imported this past year, data from the U.S. Census shows. Over 80 percent of those devices are manufactured in China.
If Trump were to move forward with his 60 percent tariff on Chinese imports, prices of iPhones will likely rise. Economists are projecting that a $1,000 iPhone 16 could cost Americans $300 more under such a tariff.
The new Apple iPhone 16 models on display upon release on September 20, 2024 at the Apple Store at The Grove in Los Angeles, California. A $1,000 iPhone 16 could cost Americans $300 more if... More Frederic J. Brown/Getty ImagesAnd it's not just phones. Lupo estimates that electronics such as laptops, tablets and gaming consoles could see price hikes anywhere between 25 and 45 percent.
"A lot of people, like students, are really interested in getting their laptops now, rather than waiting," Robertson said. "If you're going to start college or you're going to be starting a new program or you're just getting getting a new computer, people should start making moves on those now."
A 2017 report from the U.S. Bureau of Economic Analysis also found that roughly 90 percent of video and audio electronic equipment, 88 percent of electronic computers and 78 percent of small electric appliances are imported.
"[Electronics] are the ones that are probably going to be hit hard, both from Chinese tariffs and elsewhere, because we import a lots of electronics from Mexico and other places as well," Robertson said.
As of last year, Mexico has emerged as America's largest trading partner, eclipsing both Canada and China. In 2023, the U.S. and Mexico exchanged nearly $798 billion in goods and services.
"The U.S. market and the Mexican market are actually not separate markets," Robertson said. "There's a single labor market, there's a single studies market, single energy market, they're not separate markets. So, these tariffs on Mexico are a lot like putting tariffs on California... it's not good for our consumers."
Home Appliances: Stoves, Fridges, Dishwashers, Blenders and More
Household appliances are also likely to get hit with any new tariffs. Lupo forecasts prices for items like refrigerators and washing machines to increase by nearly 20 percent if the Trump tariffs go into effect. NRF predicts that American consumers will pay $6.4 billion to $10.9 billion more for these appliances.
"Having just renovated my kitchen and bath, I feel the pain!" Mary Lovely, a senior fellow at the Peterson Institute for International Economics, told Newsweek.
Employees work on a refrigerator assembly line at a factory for LG Electronics in Taizhou, in eastern China's Jiangsu province, on May 23, 2024. Household appliances, like refrigerators and washing machines, are also likely to... More STR/AFP"Many parts and pieces need for such renovations originate in China or contain parts made in China," she said. "Many kitchens are designed around cabinets that originate in China. Appliances either come from China or have Chinese parts. If the manufacturer is in the U.S., the factory will have to pay more for those Chinese parts. So many other products will be affected as well – wood, paints, tools, screws."
Robertson added that home appliances could actually be hit twice, because steel and aluminum were significantly impacted by the last round of tariffs Trump implemented.
"It's kind of a double whammy," he said. "Because you're getting the direct tariffs, plus the input tariffs, which drive up prices doubly."
Other Items: Cars, Apparel, Toys, FurnitureShoppers can also expect clothes, toys, furniture and gas-powered cars—not though not electric vehicles—to become more expensive.
Under the proposed tariffs, the NRF expects Americans to pay $13.9 billion to $24 billion more for apparel, $8.8 billion to $14.2 billion more for toys and $8.5 billion to $13.1 billion more for furniture.
"The cost of these items isn't just tied to the tariffs themselves but also to the ripple effects throughout the supply chain, which could further drive inflation," Lupo said. "Companies facing higher import taxes may pass those costs on to consumers, leaving shoppers with little choice but to pay more."
"The range of products and levels of trade taxes (tariffs) make the new Republican party the most pro-tax party in recent history," Robertson added.
The Target logo is displayed at a Target store on August 20, 2024 in Los Angeles, California. Target shook Wall Street on Wednesday after its shares tumbled to it's biggest slide in two and a... More Mario Tama/Getty Images
"All of the kinds of things you see at the larger department stores like Target or Walmart are likely to get hit hard by tariffs."
There are already signs of stress among retailers heading into what is typically their strongest season. Target's stock tumbled 22 percent on Wednesday —it's biggest slide in two and a half years — after telling investors it was dealing with increased cost pressures and continued supply chain issues.
The big-box retailer should have seen an uptick in spending between the back-to-school and Halloween season.
"Consumers tell us their budgets remain stretched, and they are shopping carefully," Target CEO Brian Cornell told investors on a conference call. He said the company was navigating through "a volatile operating environment," and that's before any tariffs have been implemented.
Appliances, iPhones and more: The big ticket items to buy before Trump's tariffs - Newsweek |
