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A new National Retail Federation (NRF) study this week found that president-elect Donald Trump’s proposed import tariffs could cut US consumers’ spending power by $46–$78 billion, or $362–$624 per household, every year they’re in effect.
Trump has proposed 10%–20% tariffs on foreign country imports and 60%–100% tariffs on imports from China in an effort to boost domestic manufacturing. The NRF study analyzed the proposed tariffs’ potential impact across six retail categories—apparel, toys, furniture, household appliances, footwear, and travel goods (like purses and luggage)—concluding that subsequent costs would be “too large for US retailers to absorb,” and be passed along to consumers.
“A tariff is a tax paid by the US importer, not a foreign country or the exporter,” NRF VP of Supply Chain and Customs Policy Jonathan Gold noted in a statement. “This tax ultimately comes out of consumers’ pockets through higher prices.”
The NRF found that if Trump’s tariff plan is enacted, consumers each year would pay: $13.9–$24 billion more for apparel (an $80 pair of jeans would jump to $90–$96); $8.8–$14.2 billion for toys; $8.5–$13.1 billion more for furniture; $6.4–$10.8 billion more for household appliances; $6.4–$10.7 billion for footwear; and $2.2–$3.9 billion for travel goods.
Zoom in: In apparel, NRF found that consumers would subsequently reduce spending by 22%–33%, and those continuing to buy these products would lose spending power. This shift would disproportionately impact low-income families, who spend three times the post-tax income in this category than high-income households.
While these tariffs would benefit the US apparel manufacturing industry, boosting revenue by $712–$1.2 billion, consumers would pay $20 for every dollar in revenue gain, ultimately resulting in a net loss for the US economy of $16–$18 billion. The study also pointed to a recent Cato Institute survey that found two-thirds of Americans oppose paying just $10 more for blue jeans as a result of tariffs, even if meant to boost the US blue jean manufacturing industry.
Findings regarding net loss were similar across the five other categories, as well as impact to low-income households, with the exception of travel goods.
Zoom out: The proposed tariffs’ impact on cost would be “detrimental” and cut US GDP by up to $50 billion, per the NRF.