4 Things the Middle Class May Not Be Able To Afford Under President Trump

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Big changes have been underway since Trump once again stepped into the Oval Office. While he is working on fulfilling promises he made to the country about spearheading a shift in the economy, it may not be panning out as his supporters and opposers alike originally expected. Instead of more money in the pockets of Americans, things feel like they are only getting more expensive.

Claiming it will reduce the U.S. trade deficit and revive domestic manufacturing Trump is moving forward with his tariff plan of attack, specifically targeting China, the EU, Canada and Mexico amongst other nations. Here are some key concerns:

• The U.S. imports various electronic devices, such as tablets, smartphones and laptops, from China the middle class may not be able to afford the tariffs on nearly $370 billion worth of Chinese goods, as the tariffs could range from 10% to 25%, covering tech, steel and consumer goods.
• As for the EU, price hikes could spike around aircraft, wine, cheese and motorcycle products. 
• Buying cars could also struggle as the tariffs could not only jack up the price of certain car manufacturers’ vehicles but also on replacement parts and maintenance products.  

Everyday goods aren’t the only things consumers will likely pay more for. Here are four things the middle class might not be able to afford with Trump in the White House.

Healthcare and Insurance Coverage

Last year, nearly 21 million people signed up for the Affordable Care Act, per the U.S. Department of the Treasury. Prices are expected to soar under Trump because he wants to dismantle parts of the ACA. He has already given executive orders to start rolling back the act. 

“Monthly premiums might skyrocket by 20%-30% for middle-class families, pre-existing conditions could once again become a barrier to coverage, many employers might reduce health benefits to cut costs, and prescription drug prices could increase without price controls,” said finance expert Andrew Lokenauth, founder of TheFinanceNewsletter.com.

Here are some other ways these rollbacks could hit the middle class right in the wallet. 

• Many medical devices, such as MRI machines, syringes and surgical gloves, are subject to tariffs as they are imported from China, which results in higher costs for hospitals and subsequently higher costs for patients.
• Medical tools, including surgical instruments and hospital beds, became more expensive due to increased raw material costs.
• Many generic drugs and active pharmaceutical ingredients (APIs) come from China and India. Tariffs increase production costs throughout the supply chain, leading to potential price hikes as pharmaceutical companies consistently pass costs to consumers and insurance providers. 

Higher Education

Pursuing a higher education could cost even more under Trump, and students should start bracing for costly changes, according to Lokenauth.

“Federal student loan interest rates might increase, income-driven repayment plans could become more restrictive, public university funding might decrease, leading to higher tuition, and student loan forgiveness programs could be eliminated or reduced,” he explained.

Housing

High interest rates are just one of the many difficulties homebuyers have dealt with over the last few years, but the Federal Reserve reduced the interest rate three times in 2024, bringing the range down to 4.25% to 4.5% where it currently stands. 

Another potential win for the market is Trump’s promise of more affordable housing, but according to Lokenauth, homebuyers could still face financial challenges.

“Mortgage rates might climb due to economic policies, first-time homebuyer programs could face cuts, property taxes might increase in middle-class neighborhoods and the mortgage interest deduction could be modified, affecting affordability,” he explained.

Trump’s policies could make housing unattainable for some in the middle class. Here’s how: 

• Higher costs for building materials or construction costs thanks to tariffs on steel & aluminum (ranging from 10% to 25%) for things like steel beams, wiring and appliances.
• Tariffs on Canadian timber raised costs for framing, flooring and roofing materials, especially for new builds, can add thousands of dollars to your total. 
• Trade uncertainty can also completely contribute to economic instability which directly influences Federal Reserve policies and interest rates.
• Higher inflation from tariffs pushed mortgage rates up, making borrowing more expensive especially for those living paycheck to paycheck in the middle class. 

Transportation

Trump seems to regularly tout his tariff plans but glosses over how his policies are likely to raise the price of cars.

“There’s no such thing as a 100% American vehicle,” Ivan Drury, director of insights at Edmunds, told CNBC. “There’s so much complexity, even though it’s a seemingly straightforward thing.”

However, that’s not the only way transportation costs could increase. Lokenauth explained that gas prices are likely to keep rising due to international trade policies, public transportation funding might decrease and electric vehicle tax credits could be eliminated under the Trump administration. Trump touted this move while campaigning but now may change his approach thanks to his friendship with head of the Department of Government Efficiency (DOGE) and Tesla CEO, Elon Musk. 

Heather Altamirano contributed to the reporting for this article.

Editor’s note on political 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.

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