Leaders and economists worry over what Trump's planned tariffs might do to business profits and consumer wallets

Businesses and U.S. economists are worried about how tariffs
could impact profits and American budgets. (Adobe Stock photo)

World leaders and CEOs are working to convince President-elect Donald Trump to reconsider his hard-line plans for tariffs against the country's biggest trade partners, which could "disrupt global trade and pummel profits," report Andrew Ross Sorkin, Ravi Mattu, Bernhard Warner, Sarah Kessler, Michael J. de la Merced, Lauren Hirsch and Tariq Panja of The New York Times. They "feel they’re making little headway in warning him of the consequences." Meanwhile, if Trump makes good on his threatened levies, U.S. consumers will likely pay higher prices.

Trump's first tariff announcements targeted Canada, Mexico and China. He said "he would impose 25% levies on Canada and Mexico, if they didn’t tighten their borders and stem the flow of illegal migration to the U.S.," The Times reports. "In subsequent social media posts, he went after BRICS countries," which include Brazil, Russia, India, China and South Africa, and other emerging markets.

Even though many Americans list high inflation, particularly on groceries and household staples, as a primary concern, "Trump conceded that he 'can’t guarantee tariffs won’t hit consumers hard," the Times reports. "That’s a concern among economists and big companies such as Walmart and Costco, who fear that levies could lead to price rises."

An estimate from The Budget Lab at Yale "found that the cost to consumers from Trump’s proposed tariffs could reach as much as $1,200 in lost purchasing power on average based on 2023 incomes, assuming retaliatory duties on U.S. exports are put into place," reports Rob Wile of NBC News. "While Trump has insisted other countries end up paying the cost of tariffs, most economists agree those costs wind up getting passed on to shoppers."

The National Retail Federation warned about "the impact of tariffs to everyday households," Wile writes. "Some Trump allies suggested the president-elect doesn’t actually plan to follow through with the proposed tariffs. . . . Rep. Dan Crenshaw, R-Texas, conceded, 'Tariffs will hurt the American consumer, that’s true. But they also make for good negotiation tools.'"