Trump's tariffs aim for wealth, but will US consumers foot higher bills?

New tariffs on cars, electronics, and essentials could drive up costs for Americans, raising concerns over whether Trump's economic strategy will burden consumers more than benefit them

Following months of speculation and public debate, US President Donald Trump has unveiled a series of "reciprocal tariffs" affecting almost every country worldwide, including India.

 

Presenting a chart outlining the tariffs, which will take effect on April 5 and April 9, Trump described the move as a historic milestone. “This is one of the most important days, in my opinion, in American history,” he declared. “It’s our declaration of economic independence.”

 

While Trump lauded his "Liberation Day" tariffs as a step toward economic revival — stating that “jobs and factories will come roaring back into our country” — economists warn that consumers will bear the brunt of these policies. Price hikes are expected for everyday essentials, including coffee and chocolate, among other goods.

 

 

Expected price increases across sectors

 

Automobiles

 

The cost of purchasing and maintaining a vehicle in the US is expected to rise significantly due to a flat 25 per cent tariff on cars and auto parts. This measure will not only impact imported vehicles but will also raise the prices of cars manufactured domestically.

 

According to Anderson Economic Group, tariffs on parts from Canada and Mexico alone could increase vehicle prices by $4,000 to $10,000, depending on the model. Luxury brands such as Audi, BMW, Jaguar-Land Rover, Mercedes-Benz, Genesis, and Lexus are likely to be hit hardest.

 

Car dealerships have voiced concerns over the financial strain these tariffs will place on American consumers. Speaking to CNN, David Kelleher, president of David Auto Group, explained that a $30,000 car may become $37,500, meaning that customers could be asked to pay an additional $175 per month. “Our customers … are middle-class people. They just can’t afford that kind of bump,” Kelleher said.

 

Clothing and footwear

 

A significant portion of apparel and footwear sold by US retailers such as Walmart and Target is manufactured abroad, with China, Vietnam, and Bangladesh being top suppliers. Trump has imposed tariffs of 34 per cent on China, 46 per cent on Vietnam, and 37 per cent on Bangladesh, significantly affecting these industries.

 

Following the announcement, fashion stocks took a hit, with Lululemon shares dropping over 10 per cent, while Nike and Ralph Lauren saw declines of 7 per cent.

 

Swiss watches

 

Luxury timepieces are also set to become more expensive, as the US has imposed a 31 per cent tariff on Swiss imports. This will affect brands ranging from Swatch to high-end manufacturers like Rolex.

 

Wine and coffee

 

The US Department of Agriculture reports that approximately 80 per cent of the country’s coffee beans are imported from Latin American nations such as Brazil and Colombia, both of which will now face a 10 per cent tariff under Trump's policy.

 

Wine imports from Italy and France will also become more expensive, as Trump has imposed a 20 per cent tariff on all EU goods.

 

Apple products

 

Apple customers in the US are likely to see price hikes on iPhones, iPads, and other products. China, a major exporter of Apple devices, has been hit with a 34 per cent tariff. Consequently, any Apple products manufactured there and imported into the US will become costlier once the tariffs take effect on April 9.

 

Apple has attempted to diversify its production by moving some iPad and AirPod manufacturing to Vietnam. However, with Vietnam also facing a steep 46 per cent tariff, these efforts may not provide much relief.

 

Following Trump's announcement, Apple shares fell 5.7 per cent in aftermarket trading.

 

Home furniture

 

Redecorating a home will now come at a higher cost, as 30-40 per cent of furniture sold in the US is imported. The top exporters, including China and Vietnam, are facing significant tariff increases, while Indonesia has been hit with a 32 per cent levy. India, another key exporter, will see a "27 per cent discounted tariff".

 

Key tariff details

 

Under the new policy, reciprocal tariffs will apply to all nations imposing tariffs on US goods, with baseline rates starting at 10 per cent. Specific measures include:

 

- A 32 per cent tariff on Chinese goods.

- A 20 per cent tariff on imports from the European Union.

- A 27 per cent tariff on Indian goods.

- A 25 per cent tariff on car imports.

 

(With agency inputs)