People shop at an Abercrombie & Fitch store in Midtown Manhattan, New York City, October 24, 2024.
Spencer Pratt | Getty Images
Former President Donald Trump’s universal tariff proposal could cause prices to soar for clothing, toys, furniture, home appliances, footwear and travel goods, a new newspaper report has revealed. National Retail Federation.
The findings, released on the eve of Election Day, join a growing body of economic and industry analysis warning of the impact on inflation of Republican presidential candidates’ hard-line approach to trade.
President Trump has said he will impose a flat 10% or 20% tariff on all imported goods. He also criticized China’s particularly high ratio of 60% to 100%.
In either case, the impact of President Trump’s tariffs would be “drastic” double-digit percentage price increases in nearly all of the six retail categories studied by the trade group, NRF found.
For example, the analysis found that the cost of clothing could increase by 12.5% to 20.6%. That means an $80 pair of men’s jeans will now cost $90 to $96. A $100 coat? It costs between $112 and $121.
These new prices will put pressure on consumer budgets, especially for low-income households, which spend three times as much of their monthly budget on clothing as higher-income households. Bureau of Labor Statistics.
The report found that toys will see the biggest price increases, ranging from 36.3% to 55.8%. The price of a $200 crib will also rise between $213 and $219.
At the macro level, these price increases will also eat into consumer spending. The report says that if President Trump were to impose both universal tariffs and particularly high tariffs on China, purchasing power could be reduced by $46 billion due to more expensive retail goods.
“The broad scale of tariffs proposed by former President Trump would result in massive tax increases for American households who would pay more on all imported goods, reducing their purchasing power and weighing on consumption and the economy as a whole,” he said. It will be,” he said. Moody’s economist Mark Zandi told CNBC.
The report does not factor in President Trump’s new proposal announced Monday to impose 25% tariffs on Mexico if it does not impose stricter border controls. The country made the announcement at a rally in Raleigh, North Carolina.
Vice President Kamala Harris has used economic criticism of President Trump’s sweeping tariff plan to frame it as a “Trump sales tax” on American consumers. Instead, she prefers a more targeted approach to assignments.
But many voters have responded favorably to President Trump’s tariff proposals, feeling that years of free trade have decimated America’s factory cities.
But tariffs during President Trump’s first term, including tariffs on foreign metals and washing machines, failed to increase overall job numbers in related industries, bipartisan advocates said. working paper Found it.
“If high taxes are imposed on these imports from China, that production will shift to other developing countries,” said Mary Lovely, a senior fellow at the Peterson Institute for International Economics. Ta.
Given the relatively high wages in the U.S., “it’s very unlikely that many jobs will be created in these industries,” LaBrie said.
In other words, Americans won’t see job growth, but prices will rise.
