How Trump's trade war could raise prices

Americans are about to taste 'life behind the tariff wall'

(Image credit: Brendan Smialowski / Getty Images)

published last week

Americans will face "significant price shocks," said Alicia Adamczyk in Fortune. The levies announced in recent weeks are certain to be passed on to consumers by importers and retailers, and will cost the average family an extra $3,800 a year, according to Yale's Budget Lab. Shoppers will quickly feel the sting at the grocery store, said Scott Neuman in NPR.org. The "vast majority" of our seafood is imported, with top suppliers including Indonesia (subject to 32 percent tariffs in 90 days) and Vietnam (46 percent). Bananas from Costa Rica and coffee from Colombia will incur 10 percent tariffs, Mexican beer a 25 percent levy, and French wine a 20 percent toll. And tariffs' indirect effects will hit consumers in less obvious ways. American farmers must already absorb 25 percent tariffs on Canadian fertilizer, and American bakers a potentially 47 percent tax on Madagascar vanilla.

"Almost everything Americans wear" will cost more, said Anne D'Innocenzio in Associated Press. About 97 percent of the clothes and shoes sold in the U.S. are imported, mostly from Asian countries that Trump hit with the highest tariffs. So a pair of Vietnamese running shoes currently priced at $155 could go up to $220, according to a trade group. Building U.S. garment factories to replace all those imports "would be hugely expensive and take years." Then manufacturers would need to overcome a lack of "skilled and willing workers" and U.S.-made components. Prices for consumer electronics are also expected to spike, said Akash Sriram in Reuters. China makes most of the world's iPhones, and factoring in only the 54 percent tariff that Trump hit the country with on "Liberation Day"—not this week's full 125 percent duty—a $1,599 iPhone 16 Pro Max could soon cost nearly $2,300.

Americans are about to taste "life behind the tariff wall," said Mihir Sharma in Bloomberg, and it will come as a rude shock. I grew up in India, where duties upward of 50 percent "turned us into a nation of onlookers," who could only read about alluring products available elsewhere. We begged visitors to bring us Walkmans and endured domestic goods "of subpar quality." U.S. leaders who faced down the Soviets in the Cold War understood the strength of "a consumer's passion" and that "a longing for Levi's jeans and rock records could bring down a superpower." If Trump cuts off America from world trade, his "legacy will be a gray, resentful, and defeated nation."