Americans’ frustration with inflation may have helped Donald Trump win the White House, but the president-elect may be stoking future price growth before he even takes office in January.
On Monday, Trump announced he would impose broad new tariffs on Canada, Mexico, and China in an effort to crack down on illegal immigration and drugs. All products entering the U.S. from Canada and Mexico would face a 25% tariff, he said on Truth Social, and goods from China would see an additional 10% levy.
“Most people don’t understand that if you impose tariffs, that actually raises prices,” said Dana Peterson, chief economist at The Conference Board. “It’s not uncommon for people to vote based upon things that are not essentially associated with their economic good, right?”
![Joan Fedelischak of Streetsboro shops for a washing machine at the new Lowe's Outlet on Tuesday, Oct. 17, 2023, in Cuyahoga Falls, Ohio, in the Chapel Hill Plaza. [Phil Masturzo/ Beacon Journal]](https://www.usatoday.com/gcdn/authoring/authoring-images/2024/11/26/USAT/76585925007-usatsi-21668091.jpg?width=660&height=476&fit=crop&format=pjpg&auto=webp)
In 2023 dollars, the tariffs announced Monday would erode the purchasing power of the average American household by $1,200, says Ernie Tedeschi, director of economics at the Yale Budget Lab.
Though consumers may be able to shift some spending patterns – from items that are imported to domestic versions, for example – that’s not possible with every category of consumer goods, Tedeschi said.
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One example is agriculture. The United States is Mexico’s largest agricultural trading partner, buying about 92% of Mexican exports in the category,…
