While there’s been months of debate about how tariffs from the Trump Administration will ultimately impact consumers and their budgets, families may soon have a better idea of how they’ll be affected. The United States has now imposed higher tariffs on products from a number of countries.
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According to the Associated Press, it’s been around a century since the nation had an overall import tax rate as high as the one set in August. But it’s still not clear how much all of this will impact consumer prices.
GOBankingRates talked to financial and consumer experts for their predictions on when experts expect true cost effects to be felt by average Americans. While The New York Times reported consumers are beginning to feel the pinch, not all experts agree. With so much uncertainty, there’s no general consensus on when the effects will kick in — with some experts saying soon and others saying it may be years.
So Much Uncertainty
“This is a really tough one to answer,” said Brandon Gregg, advisor and market president with BBK Wealth Management. “I believe there has been a lag in price changes due to the uncertainty of where tariffs will finally land and whether deals would be put in place.”
Now that the most recent tariffs are in effect, Gregg said, many companies may start to look at raising prices. He said earnings season is here and many companies are showing hits due to tariff impacts, but aren’t providing clear guidance as to when they may pass these costs to consumers.
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Higher Prices and Empty Shelves
“Some companies may eat the cost while others have no other choice but to raise prices,” Gregg said. “Again, it’s tough to have any timeline as Q2 results did not reflect a large change. Until numbers change, companies may wait it out to see how it impacts things long term.”
“Retailers generally pass cost increases on to consumers with price increases. Price increases only cause inflation if the goods are available for sale. The CEOs of Walmart and Target privately warned President Trump in April that tariffs could lead to empty shelves,” said Kevin Estes, certified financial planner (CFP) and founder of Scaled Finance.
Keeping Inflation in Check
Estes said inflation may not rise much for years due to a variety of factors:
- About half of household spending is on housing and transportation. Higher interest rates have limited major purchases recently.
- Homeowners with low fixed-rate mortgages may stay put for decades. Renters may not be able to buy given today’s interest rates. Housing demand has fallen because deportations have removed residents and deterred immigration.
- Americans are keeping vehicles longer.
- Energy has largely avoided new tariffs.
- Few of the world’s largest luxury brands are headquartered in the U.S. Tariffs may cause consumers to shift to less expensive domestic options.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: Trump Tariffs: When Experts Expect True Cost Effects on Americans Will Kick In
