According to a study by the Center for American Progress, the new tariffs imposed by Donald Trump could cost an average of $5,200 per year for each American household.
The major issue is the soaring prices of essential products, including food, clothing, cars, electronics, construction materials, and household goods.
Disproportionate Impact on the Less Affluent
An analysis by Yale University reveals that families earning $50,000 per year will see their disposable income fall by 2.3%, while those earning over $500,000 will only experience a 0.9% decrease.
Economist James Surowiecki stresses that these taxes will primarily burden ordinary consumers: “Tariffs are a tax, and American consumers will bear the majority of the cost.”
A teacher from Maryland shared with Al Jazeera that she has decided to forgo purchasing a new car this summer, saying, “It’s become unrealistic.” According to the National Retail Federation, a pair of shoes that previously cost $33 would now cost $51.
A Regressive Tax System and a General Price Increase
Economists Ernie Tedeschi (Yale) and Kimberly Clausing (Peterson Institute) underscore that tariffs act as a consumption tax, which is especially burdensome for low-income households. A household earning $100,000 would lose 2%, but a family living on $20,000 would suffer a relative loss of 4%.
Tariffs could lead to a 2-3% price increase on top of the current 3% inflation. Some products that would be particularly affected include:
Leather shoes: +18%
Clothing: +17%
Household appliances: +10%
Rice: +10%
Fish, nuts, and fresh fruits: +4%
The Retaliation Shock
China has already imposed a 34% reciprocal tax on American goods, and the European Union is preparing countermeasures. The UK is developing a list of targeted products, but no immediate action has been taken.
Cheap products from countries like China, Vietnam, and Thailand, which are important for low-income households, will become much more expensive.
The Vietnamese Case
Trump announced that he had exchanged words with Vietnamese President To Lam, requesting him to remove Vietnamese tariffs if an agreement is reached.
This announcement led to a 4% climb in Nike’s stock price, as the company produces some of its products in Vietnam. Trump imposed a 46% tariff on imports from Vietnam.
Trump justifies his decisions by wanting to “restore economic sovereignty” and bring industrial jobs back to the United States. His advisers argue that these tariff pressures aim to force more favorable bilateral agreements for Washington.
Trade between the United States and Vietnam reached $150 billion last year, with the U.S. facing a $123.5 billion trade deficit, indicating a growing imbalance between the two countries.
Economic Sectors Under Strain
The sectors most exposed to the repercussions include:
Technology: Disruptions in international supply chains
Retail: Clothing, household appliances, and high-tech goods
Agriculture: Vulnerability to trade retaliations, especially from China
Automobile Industry: Rising production costs (steel, aluminum)
A Risk of Inflationary Spiral
Experts predict a widespread increase in costs, particularly for the most vulnerable households. Meanwhile, the risk of a recession is growing. Major powers are preparing to respond, heightening the possibility of a prolonged global trade war.
While Donald Trump promises a new era of economic prosperity, the first effects of his tariff decisions seem to be primarily impacting the wallets of ordinary Americans.
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