President Donald Trump’s new tariffs—10% on most U.S. imports and 125% on Chinese goods—are expected to drive up consumer prices across key sectors. Americans could see apparel costs rise by 33%, cars by nearly 16%, and iPhones by over 30%. Some retailers may absorb part of these increases, but many will pass them on to consumers, potentially shrinking product sizes without lowering prices (“shrinkflation”). While businesses with inventory buffers may delay price hikes, fresh produce and other perishables will reflect the tariffs almost immediately, with average food prices projected to rise by 4.5%.
The labor market may also suffer, with forecasts predicting up to 600,000 job losses by the end of 2025, raising unemployment by 0.5%. Economists caution that these tariffs could weaken consumer spending and strain supply chains, leading to broader economic challenges. Ultimately, American consumers and workers are likely to bear the brunt of these new trade policies.