Feeling the Heat: The Impact of New Tariffs on Your Wallet
Increased costs for steel and aluminum products due to Trump's imposed tariffs
Tariffs on steel and aluminum, to the tune of 25%, announced by President Donald Trump, might soon push up the prices of everyday items like refrigerators, beer, bicycles, and cars. Here's why.
These tariffs, enforced from next month, impose a hefty tax on all foreign steel and aluminum, a move Trump previously made during his first term.
Experts suggest that the increased costs could filter down to retailers and eventually consumers.
Kyle Handley, an economics professor at the University of California, San Diego, says, "This will ripple through the economy." He predicts that the price hikes could materialize anywhere from three months to a year.
In response to our request, the White House stated that the policy would bolster economic performance. White House spokesperson Kush Desai remarked, "...Trump will again use tariffs to level the playing field and usher in a new era of growth and prosperity for American industry and workers."
Below is a rundown of the goods that might become more expensive due to steel and aluminum tariffs:
Autos and Trucks
Steel is the primary material in a car, making up approximately 60% of its weight, according to the American Iron and Steel Institute. As steel imports become costlier, carmakers will likely see their input costs rise, potentially leading them to hike their own prices.
Handley comments, "There's a lot of metal in a Ford truck. If it's more expensive, they'll have to charge more for the car."
Refreshments: Soda and Beer
Aluminum tariffs could result in higher prices for beverages packaged in aluminum cans, such as beer and soft drinks.
During Trump's previous tenure, the U.S. beverage industry reportedly shelled out $1.7 billion due to aluminum tariffs between 2018 and 2022.
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Home Appliances
Large home appliances, such as refrigerators and washing machines, incorporate steel, making them susceptible to potential price increases.
During Trump's earlier term, major appliances exhibited price increases of between 5% to 10% between June 2018 and April 2019, with inflation at around 2%.
Bicycles
Bicycles also rely on steel and aluminum, which may lead to higher production costs and eventually, increased bicycle prices. Last month, trade organization People For Bikes expressed concern about tariffs on Canadian and Mexican goods, as well as a 10% tariff on Chinese goods.
While these figures represent potential consequences, actual increases will depend on various factors, including supply chain resiliency and manufacturers' negotiation strategies with suppliers.
- The announced 25% tariffs on steel and aluminum by President Donald Trump could potentially lead to increased costs for retailers and consumers in various sectors, such as the automotive, refreshments, home appliances, and bicycle industries.
- As steel is the primary material in a car, composing approximately 60% of its weight, the increased costs of steel imports could potentially cause carmakers to raise their prices, as indicated by Kyle Handley, an economics professor at the University of California, San Diego.
- Aluminum tariffs could result in higher prices for beverages packaged in aluminum cans, such as beer and soft drinks, considering that these materials are used extensively in the packaging sector.
- The tariffs on steel and aluminum could also impact the prices of home appliances, such as refrigerators and washing machines, due to their reliance on these metals.
