How Tariffs Quietly Drive Up Prices — And Which Products Will Cost You More
Written by
Cynthia Measom
Edited by
Amber Barkley
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Tariffs have a direct effect on what you pay, but which products will cost you more depends on what they are and if alternatives are available. In some cases, sellers pass the added cost of the tariff to you, while others choose to absorb the cost to stay competitive.
Don’t expect a grand announcement from retailers about these price increases. Tariffs drive up prices quietly, without warning.
As a heads up, here are some of the products that will likely cost you more while tariffs are in effect.
Game Consoles and Smartphones
Smartphones and video game consoles are some of the hardest-hit products, because they are considered premium products with no alternatives for consumers to switch to, according to The Wall Street Journal.
For example, almost all gaming consoles are made in China, so it’s likely that the entire tariff cost will be passed on to consumers, because the manufacturers know that consumers will likely still buy their products. A 10% tariff on a $500 console could raise the price to $548.
Wine
A 10% tariff on imported Italian wine could raise the product’s price by 10% — from $21.99 to $24.08, the Wall Street Journal reported.
The difference in what you end up paying also depends on things like exchange rates, how many alternatives are on the market and the way sellers choose to set their prices. For example, domestic wine producers may raise their own prices in response to the price hike for imported wine — not because their costs increased, but because they believe they are justified to charge more.
Cars and Large Appliances
Tariffs on imported cars, refrigerators and washing machines also tend to be passed on to the consumer. When Trump enacted tariffs on washing machines in 2018, prices rose by 12%, according to researchers from the University of Chicago.
A 25% auto tariff is now in effect. Bank of America analysts estimate that the price of impacted vehicles could increase as much as $10,000 if the full amount of the tariff is passed on to consumers, CNBC reported.
And that’s not where the price hikes will likely stop. As with wine, domestic producers of cars and large appliances often take the opportunity to raise prices to match the higher cost of imports — even if their own production costs haven’t changed.
Products With Lots of Competition Will Be Less Affected
Products that have plenty of alternatives, such as clothing, car parts and cosmetics, aren’t likely to have their prices as heavily impacted by tariffs.
Moody’s analysis found that a 10% tariff on a tablecloth imported from India might raise prices by only 2%, the Wall Street Journal reported. That’s because there are plenty of manufacturers worldwide offering similar products. Retailers are less likely to pass along the full cost when shoppers can easily find a cheaper alternative.
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