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President Trump has promised to get tough on America’s trading partners. But with the administration now slapping hefty duties on imported goods such as steel and washing machines, and threatening them on many others, it’s American consumers who could be hurt.
While Trump has long complained that trade agreements with nations like China and Mexico need to be renegotiated, his biggest move so far has been placing tariffs — import taxes, payable to the U.S. government — on goods these countries import into the U.S.
The taxes are meant to help U.S. manufacturers by making foreign goods comparatively more expensive and, therefore, less attractive to consumers. Most economists disagree with Trump’s approach, however, arguing that the tariffs could easily destroy more U.S. jobs — mainly at companies forced to pay higher raw materials costs — than they create. “Companies that can will pass the increased costs onto consumers,” says Erica York, an analyst at the Tax Foundation, a Washington think tank. “If they can’t pass them on, that will come out of profits, which means less money to hire or give raises.”
The first tariffs, targeting a handful of consumer goods, debuted earlier this year; they were followed by taxes on raw steel and aluminum. Now a new wave focusing specifically on hundreds of Chinese industrial goods is set to go into effect in July. And Trump has threatened to target still more Chinese goods — possibly including many popular consumer items like televisions and cellphones.
Here’s a complete rundown of all the goods that could cost you more — or already do — as a result of Trump’s trade war.
Trump fired an initial shot in his trade war in January, targeting just two products — washing machines and solar panels. The administration placed a tax of 20% to 50% on large residential washing Machines after Whirlpool complained that foreign competitors, including Korean giants Samsung and LG, were unfairly undercutting its prices.
The move initially helped Whirlpool — the company’s stock jumped 5% and it said it would hire 200 workers — but the benefit was offset when the White House also slapped tariffs on imported steel (more on that in a bit), pushing up its costs.
Now U.S. consumers stand to lose. The Wall Street Journal, citing Labor Department data, recently estimated the average cost of washing machines had shot up 17% in just the past three months.
As with washing machines, tariffs on solar panels — in this case 30% for 2017, with lower rates over the next several years — followed complaints from U.S. manufacturers. But the solar tariffs were highly controversial even within the solar industry, with the Solar Energy Industries Association predicting the new tax could cost as many as 23,000 U.S. jobs, as higher costs prompt homeowners and businesses to put off solar installations. (That’s nearly one out of every 10 jobs in the solar industry.)
Just how much could the tariffs cost you? In May, energy marketplace EnergySage estimated they would add $500 to $1,000 to the cost of the typical home installation project. Such projects typically cost $16,000 to $21,000, according to the group’s estimates.
Beer and Soup
Trump followed up with a broader set of tariffs starting June 1: a 25% levy on steel and 10% levy on aluminum. Few Americans buy these these materials directly, almost everyone buys products that include them — like cars, for instance, or the cans that hold beer, soda, and soup.
Of course, the cost of metals is just one component of the ultimate price consumers pay.
When it comes to foodstuffs, the increase is likely to be moderate. Shortly after the tariff was announced Trump commerce secretary Wilbur Ross went on TV lugging cans of Campbell soup, insisting the steel tariff would boost the cost of each can by only a fraction of a penny. Similarly, in March The New York Times estimated the aluminum tariff could boost beer costs by something like a penny a can.
Cars, on the other hand, use a lot more steel and aluminum than a can of soup. Ross himself said that the administration’s 25% steel tariff could add as much as $175 to the price of a $35,000 car. Of course, he called that amount “trivial” — but others have noted that it’s about what many people will get from the Trump tax cut.
And there’s another worry for car buyers: In addition to taxing raw materials, President Trump has said he might institute a separate tariff as high as 25% on foreign cars and car parts. Automakers oppose the move, which Trump says may nonetheless be justified on national security grounds.
A new report from Moody’s, released Monday, said European automakers without U.S. plants (like Jaguar and Land Rover) would be among the hardest hit. But GM, which imports almost a third of the cars it sells in the U.S. from plants in Canada and Mexico, and Ford, which imports about 20%, would also suffer.
Last week the American Action Forum, a Washington think tank, estimated a new 25% tariff would boost the cost of buying an imported car by $4,000 to $5,000. Even cars assembled in the U.S. — which nonetheless typically include many foreign auto parts — would see a roughly $1,300 price increase.
Trump escalated the trade war this month, focusing on China. On June 15, citing China’s disregard of U.S. intellectual property, the administration announced a new 25% tax on roughly $50 billion in Chinese imports.
The administration initially threatened to target as many as 1,300 Chinese products. In the end, it said the new 25% tax would start July 6 and apply to roughly 800 goods — mostly industrial products — with a import value of more than $30 billion. (Another roughly 280 goods, worth about $14 billion, are expected to be hit shortly thereafter.)
Many high-profile consumer goods, including flat-screen TVs, were left off the July 6 list, in an effort to spare consumers visible pain. But that still leaves water coolers, mini-fridges, thermostats, and air purifiers on the list, according to Jonathan Gold, an official at the National Retail Federation, a trade group. Come July, these appliances could cost you up to 25% more, if businesses seek to pass the full cost on to consumers.
Cell Phones, Computers, Toys and Just About Everything Else
Many other goods on the July 6 list — including semiconductors, the computer chips that power PCs and smartphones — are important components in finished goods consumers love, and could eventually drive up prices on these too.
And Trump has threatened to up the ante again, if China retaliates with tariffs of its own on U.S. goods.
At this point, the president has either planned or threatened tariffs on the vast majority of imported Chinese goods. And Americans buy a lot of those: $84 billion worth of Chinese-manufactured cell phones just last year, as well as $67 billion worth of computing equipment and $28 billion worth of toys, to name some of the most popular products.
In other words, if the Trump administration actually goes through with all its threatened levies, it’s unlikely to avoid — as it did earlier this month — targeting popular consumer goods.