3 Things Trump Has Promised To Do on ‘Day One’ That Could Impact Your Wallet
Written by
Tobi Opeyemi Amure
Edited by
Zuri Anderson
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
President-elect Donald Trump is set to keep up his momentum right from day one in office as he promises to sign several executive orders.
His “Day One” agenda will include hefty tariffs and a special revenue service to uphold campaign pledges. These actions could instantly help some groups and may create long-term economic stability or potentially international backlash.
As Jan. 20 approaches, Americans are preparing for potential economic effects that may affect their known and unforeseen finances.
Here are three important financial actions Trump promises to take on his first day as president and their potential impact on you.
1. Imposing Universal Tariffs
President-elect Trump’s proposed 25% tariff on goods from Mexico and Canada, along with an additional 10% on Chinese imports, could significantly impact American consumers’ wallets.
“Higher tariffs could raise consumer prices and cause international retaliation, hurting U.S. exports,” said Karla Dennis, enrolled tax agent and CEO of KDA, Inc.
These tariffs, if implemented, would likely lead to price increases across a wide range of products. This includes the automotive industry — a sector in which production costs could rise as a result of relying so heavily on cross-border supply chains. New vehicles will cost more to American drivers.
Produce prices in the grocery sector could spike on items including avocados, tomatoes and berries, which typically come from Mexico. This could raise the cost of shoppers’ fruit and vegetables or more.
Most of the electronics and household appliances we use come from China, which will also likely become more expensive. Clothing and footwear prices may rise, too, undoubtedly hurting already limited consumer spending on essentials.
2. Rolling Back Energy Regulations
Trump promises to roll back energy regulations with executive orders on day one, which could have mixed effects on consumers’ wallets.
On the immediate scale, deregulation may mean lower energy costs, allowing consumers to pay lower utility bills or fuel costs.
Domestic energy production could also increase if, for example, oil and gas drilling were expanded on federal lands and waters. This could help lower gasoline prices. Furthermore, reverting emissions limits to levels seen under the previous administration may reduce electric bills. In some areas, this could result in 5 to 10% savings on monthly utility expenses.
But the impact of these policies might be even longer lasting.
Immediate savings on energy costs might be easy, but it could come at a cost in the environment, which would mean higher prices in other areas. For instance, citizens might benefit from lower electricity prices because of reduced regulations on coal power plants, which bring down the price. However, air pollution will cause higher healthcare costs.
3. Creating an External Revenue Service
Trump’s proposed plan to establish an “External Revenue Service” (ERS) on Inauguration Day marks a significant shift.
This change would alter the U.S. approach to taxing international trade and collecting tariffs. The agency has not yet provided complete details, but when it does, it could significantly affect American consumers and the economy.
The ERS could be used to collect tariffs and other foreign revenues in order to simplify the administration and enforcement of new trade policies. That could save the government money on collecting tariff revenue, and this could help in bringing more government income. However, any costs of those tariffs are likely to end up being borne by consumers in the form of more expensive imported goods.
Tariffs are taxes on imported goods that consumers ultimately pay through higher prices. The Peterson Institute for International Economics estimates that Trump’s proposed tariffs would cost a typical middle-income household about $1,700 in increased taxes annually.
This diminishes the purchasing power of American households, especially lower- and middle-income families, who spend more on goods and services.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
More From GOBankingRates
