Experts at CNBC’s Financial Advisor Summit explained that President-elect Donald Trump’s proposed tariffs could lead to price increases for U.S. consumers. Tariffs, a tax on imported goods, are paid by U.S. companies that may pass these costs onto consumers or absorb them, potentially reducing profits, shareholder returns, and employment opportunities.
Trump’s Tariff Agenda
Trump has pledged a sweeping tariff policy during his second term, including universal tariffs of up to 20% on all trade partners and at least 60% on Chinese goods. A Tax Policy Center analysis estimates such measures would raise the average U.S. household’s costs by $3,000 in 2025, with low- and middle-income families facing the greatest financial burden.
Additional Tariff Proposals
Trump also proposed imposing 25% tariffs on Canada and Mexico to address issues like drug trafficking and migration. These measures would target the U.S.’s largest trading partners, further influencing the cost of goods and trade dynamics.
Uncertainty Surrounding Implementation
The specifics of Trump’s tariff plans remain unclear, including the countries and products targeted. Experts debated whether Trump could unilaterally impose universal tariffs. Many believe his proposals might serve as negotiating tactics to pressure trading partners, though others fear they could become reality.
Political and Economic Ramifications
Trump’s tariff policies could be used to offset the cost of a Republican-backed tax cut package. His nomination of Jamieson Greer as U.S. trade representative signals a continuation of his first-term trade strategies.
Expert Opinions on Potential Outcomes
- David Zervos, Jefferies: Suggested Trump’s tariff plans may be strategic leverage during negotiations.
- Barbara Doran, BD8 Capital Partners: Expressed concern that the proposals might go beyond negotiation tactics.
The potential economic impact of Trump’s tariff policies remains uncertain, but they are expected to have wide-ranging implications for households, businesses, and global trade relationships.
