Reports suggest that the new administration has not yet settled on its final tariff plans, making it challenging to gauge the actual impact on Americans’ grocery bills and car payments. By some accounts, the tariff rollout might end up being more gradual than Trump’s campaign promises.

“Tariffs are often used as bargaining chips, leading to exemptions or scaled-back versions during talks,” says Joe Rodriguez, Associate Professor of Finance at Eastern Michigan University. “Tariff policies can evolve quickly, with exemptions, deadlines, and diplomatic negotiations constantly reshaping the playing field.”

If you’re concerned about what the impact could be on your wallet, hurry up and wait. It’s going to take time for the administration’s final plans to emerge—and Rodriguez warns that consumers may find it difficult to predict pricing trends and time their purchases to avoid the impact.

Once they become clear, the immediate impact on the prices you pay for everyday goods could be significant, but ongoing trade negotiations could change that picture abruptly.

Understanding Trump’s proposed tariffs

On the campaign trail, candidate Trump proposed a sweeping tariff plan that could significantly reshape U.S. trade relations. The cornerstone of the campaign plan was a universal 10% to 20% tariff on all imports, with an additional 10% levy on Chinese goods. He also suggested imposing a 25% tariff on imports from Canada and Mexico, the U.S.’s largest trading partners.

“Take for example China, the most likely target for additional tariffs,” says Laurence Ales, professor of economics at Carnegie Mellon University’s Tepper School of Business. “Today the largest category of imports from China into the US is electrical machinery. This is a broad category ranging from telephones to computers, from batteries to toys. Essentially almost any consumer good is at risk of higher prices.”

To implement and manage these tariffs, Trump has announced plans to create an External Revenue Service, mirroring the role of the Internal Revenue Service. While Trump argues these measures will boost domestic manufacturing and address trade imbalances, economists warn they could lead to higher consumer prices, potential retaliation from trading partners, and slower economic growth.

“With other nations putting counter-tariffs on American exports, there is a serious risk of global retaliation, which may hurt American workers and lower demand for American goods,” says Chad Harmer, the founder and CIO at Harmer Wealth Management. 

As companies strive to control rising prices, supply chain disruptions may occur, resulting in delays or shortages of essential items. Harmer warns that tariffs on essential imports, such as semiconductors, may also impede innovation, especially in sectors like technology and the automotive industry.

Groceries, autos, clothing, and electronics could see the biggest price hikes

For the average U.S. consumer, the biggest impacts will likely be felt at grocery stores, auto dealerships, and at the mall when buying electronics and clothing. Gasoline prices could rise if or when tariffs hit oil imports from Canada.

Harmer sees import taxes on agricultural products like fruits, fish, and dairy causing supermarket prices to rise quickly, impacting both households and the restaurant business. “That’s in addition to textiles and footwear, where retail costs for imported clothing and accessories may increase, electronics, which depend on imported semiconductors and components, are also at risk,” he says.

“Consumer electronics often rely on components sourced from numerous countries, so tariffs on specific parts can raise overall retail prices,” says Rodriguez. “Large appliances and household goods that depend on steel and aluminum could also see sharper price increases if the raw materials become more expensive. 

Rodriguez notes that automobiles and auto parts are sensitive to tariffs on both metal inputs and imported components, and even clothing or footwear could be affected if tariffs apply to textiles or raw materials—but this is all speculative at the moment.

According to Shaya Sheikh, Ph.D., associate professor at the New York Institute of Technology, crude oil imports from Canada make up more than 20% of the oil processed by U.S. refineries. He warns that about 70% of imported Canadian oil goes to refiners that supply the Midwest. “Many could struggle to find a direct replacement for Canadian oil or face paying a higher price if that oil is subject to tariffs,” says Sheikh.

Jean-Baptiste Wautier, financial and global economic policy leader at Wautier Family Office, warns that new home construction and machinery could be impacted. “Tariffs would disrupt supply chains and increase production costs. Higher costs on imported materials, such as lumber and steel, would make homes more expensive to build, exacerbating housing affordability issues.”

Will tariffs drive inflation higher?

Ales notes that tariffs contribute to higher inflation by increasing the cost of imported goods, which in turn raises overall consumer prices. 

“This inflationary pressure reduces consumers’ purchasing power, as their income does not stretch as far as it did before the price increases,” he says. “In the long run, sustained higher inflation can erode savings and reduce the standard of living for households.”

When manufacturers spend more on inputs, they compensate by marking up their final goods. “If this persists, consumers see a decline in their purchasing power, especially those on fixed incomes or with wages that do not keep pace with rising prices,” says Rodriguez. “In response, the Federal Reserve might raise interest rates to mitigate inflation, which in turn would make mortgages, auto loans, and credit card debt more expensive.”

This could lead to a spiral, pushing wages higher as businesses compete for labor, further intensifying inflation pressures.

The job market could see mixed impacts from tariffs

Any industry that heavily relies on imports could face employment issues. Ales warns that the increase in prices on a wide range of consumer goods could reduce demand, potentially leading to job losses for consumer-facing businesses.

“As tariffs increase the competitiveness of U.S.-produced goods, job growth may occur in certain industries, such as domestic manufacturing and agriculture,” says Harmer. “However, because of rising costs and declining demand, industries that depend on imports, such as retail, technology, and logistics, may experience layoffs.”

Rodriguez admits that domestic producers that are suddenly protected from foreign competition may experience a short-term boost in both production and hiring. 

“On the other hand, sectors reliant on exports, such as U.S. agriculture, often face retaliatory tariffs that reduce foreign demand, potentially leading to fewer jobs and downward pressure on wages,” he says.

What can you do to prepare for the Trump tariffs

If you’re considering making a large purchase, like a car or a home appliance, timing it right could become an issue. While some recommend making those purchases ASAP, Sheikh says this could be premature. 

“We need to wait for specific tariff details before making significant purchasing decisions,” she says. “In general, consumers need to be prepared for potential modest price increases.”

“Under tariff conditions, switching to domestically manufactured alternatives might provide superior value,” advises Harmer. “Additionally, delaying major purchases, like cars or electronics, could also be a calculated tactic to prevent price increases.”

“In markets like electronics and cars, consumers can also seek out gently used or refurbished models to avoid the higher price tags affecting new items,” says Rogriguez. “Timing major purchases is another tactic: If consumers hear that tariffs are imminent, it might be worth making the purchase beforehand.”

If the Trump tariffs lead to inflation, borrowing costs for things like home or car loans could rise. If you’ve been considering financing a big purchase, locking in current rates now could save you money in the long run. 

“Also, keep an eye out for sales,” suggests Wautier. “Retailers may offer discounts to clear out inventory before the full effects of tariffs hit, which could be a good opportunity to grab some deals.”

The bottom line on Trump’s tariffs

Basically, don’t panic but be prepared. If you know you’ll be making a large purchase or taking out a loan, be ready to act soon or risk higher prices and rates. 

“The key here is to stay informed and flexible,” encourages Wautier. “Tariffs might take a while to impact prices fully, so you’ve got time to plan. Keep an eye on your spending, adjust where needed, and don’t be afraid to shift priorities to keep your budget on track. With some preparation, you can handle these changes without too much stress.”