Consumers Will Pay For Trump’s Tariff Increases

If you're tempted to dismiss the academics warning about the economic damage caused by tariffs, I understand.

Tariffs are a tax on imported goods—clothes, shoes, toys, car parts, appliances, you name it. But the extra cost doesn’t come from the foreign companies that produce these items; it’s paid by the U.S. company importing the goods, which often passes the cost on to consumers.

"Tariff" is one of those terms that makes your eyelids droop like they did in your 9 a.m. econ class, Allison Morrow wrote in her analysis for CNN.

But if you won’t listen to economists' warnings about former President Trump’s unconventional economic plans, consider the perspective of the people running the companies that make the things you buy: prices are likely to go up.

While the exact timing and scale of price increases are uncertain, you can be sure you’ll need more dollars for everyday goods if Trump’s sweeping tariffs are enacted.

“If we get tariffs, we will pass those tariff costs back to the consumer,” said AutoZone CEO Philip Daniele in a September earnings call. Daniele noted that AutoZone doesn’t wait until policies are enacted; once they know the markup, “we generally raise prices ahead of that.”

Here’s a quick primer: tariffs are a tax on imported goods—clothes, shoes, toys, car parts, appliances, you name it. But the extra cost doesn’t come from the foreign companies that produce these items; it’s paid by the U.S. company importing the goods, which often passes the cost on to consumers.

Trump’s trade agenda could almost certainly raise the prices of imported goods from around the world. This isn’t speculation—it’s simply how tariffs work, and we have the past six years of global trade to prove it.