Sweeping new tariffs set to take effect in April have the potential to drastically dent the average household budget at a time when higher prices have already kept many American consumers in discount mode for years, experts say.
“The consumer is not going to win here, but exactly when and how hard is hard to know,” said Katie Thomas, who leads the Kearney Consumer Institute.
Here’s what we do know about how the average American household is likely to experience the higher prices – and what can be done about it.
More: Trump's tariff chart, mapped
Trade war winners and losers
An analysis from the independent Yale Budget Lab reckons the tariffs will cost the average household $3,800 in 2025, with a disproportionate impact on clothing and textiles, which are likely to increase in price by 17%.
Other sectors of the marketplace that have outsize exposure to the countries that will face the stiffest levies, such as China and Vietnam, include footwear and consumer electronics, said D.A. Davidson analyst Mike Baker.
Fresh foods are likely to face a big price increase – and one that comes quickly, Thomas said, while packaged and processed foods, which are mostly assembled in the U.S., may fare better. Goods that have a longer shelf life, like appliances, may have been stocked before the tariffs took effect, and may take longer to show higher prices.
Bigger retailers like Costco, Target and Walmart will be more resilient than small businesses that aren’t able to lean on their suppliers for concessions. But Ted Rossman, a senior industry analyst at Bankrate, also notes that some off-price retailers such as TJ Maxx may be more resistant to price increases, since they source their inventory from leftovers at domestic apparel stores.
Should you time your purchases?
No matter how gloomy the headlines – about the tariffs, the stock market, or anything else – “don’t rush to make purchases,” Rossman said. The stock market will bounce back, eventually, and some of the tariffs may be scaled back or reversed altogether.
But on the other hand, if there are ways for you to strategically splurge now on something that might last for some time, it might be a good idea, Thomas advised.
One of the best things consumers have going for them now, she said, is the ability to comparison shop broadly, in many categories, from basic needs like groceries to discretionary items.
How to cut costs as tariffs bite
After years of high inflation, many Americans are already feeling squeezed, Rossman said. “A lot of the low hanging fruit is gone" in terms of switching from upscale to down-market retailers, buying store brands instead of brands considered premium, and so on.