How will Donald Trump's tariffs affect U.S consumers? Will cars, gasoline, and medicines cost more? Here's a breakdown
tariffs on imports from Canada, Mexico, and China have raised concerns about how it would impact Americans.
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How do tariffs work?
Tariffs are a tax on the goods imported into the country in simple terms. For example, if the value of an imported car is $50,000 and a 25% tariff is charged, that would make it $12,500 in cost, reported BBC. Even though the company importing the car has to pay the fee, they may just add it for the buyer to pay a higher price. That is true for most products: if tariffs rise, so do prices.
Will you pay more for everyday items?
Economic studies of the impact of the new tariffs that Trump imposed in his first term of office between 2017 and 2020 suggest most of the economic burden was ultimately borne by US consumers, reported BBC.
As per a study by the non-partisan Peterson Institute for International Economics, the average middle-income family could lose about $1,700 per year due to higher prices. Another study by the Centre for American Progress, based on different methodologies found that families could lose between $2,500 to $3,900 every year.
What about cars, gas, and medicine?
Cars: The 25% tariff on imports from Canada and Mexico could make foreign cars pricier. Even American-made cars might cost more, as rising production costs trickle down to consumers.
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