Polibiz: Trump’s New Tariffs and What it Means for You

The fervor of the Presidential election is over, Black Friday just ended with its most successful event ever, and the holidays are upon us. It would seem all is well, yet that belies the uncertainty surrounding 2025. On January 20th of next year, President-elect Donald Trump will officially take office and like any President, he will want to get to work quickly. The spearpoint of his agenda and likely his first order of business, is the sweeping tariffs he has proposed on imports. These are both steep and target multiple countries and will affect businesses and consumer alike. As we enter 2025, we are left to wonder how fast they will take effect and what the consequences will be?

Presidential action is slow as decisions usually pass through multiple checks or votes from various government branches before anything really goes into effect. This may leave people feeling like they have time before any of the tariffs get passed, and that would be a mistake. These are normally regulated by Congress, yet much of that power has been passed to the executive branch. Exceptions like the Trade Expansion Act of 1962 allow the President to raise tariffs on imports that pose a threat to national security, this can all be done without congressional approval. Trump has already used this act when he raised these on steel and aluminum back in 2018. The Commerce Departments definition of imports that threaten national security is broad and it is believed that this is how he will pass new ones when he takes office. This means that we will see the effects earlier in the year than many are anticipating.

We won’t know the extent of Trump’s agenda until he officially implements them, yet we do know what he is aiming for. During his campaign, he said that he was planning on creating 20% tariffs on most imports, those number have since gone up. He now plans to implement a 25% tariff on all imports from Mexico and Canda unless those countries control the flow of illegal drugs and immigrants. It is unlikely that this issue will be resolved by Jan. 20th and the President of Mexico has already said she will retaliate if they take effect. Mexico is the United States’ largest source of imports and Canda is third. Making matters more complicated is that 50% of trade with those countries is driven by supply chains that cross the borders multiple times. The 25% would be applied each time a product in those supply chains crosses a border. These would also go against the trade agreement currently in place between the U.S., Canda, and Mexico, an agreement that he originally renegotiated.

Additionally, he is threatening to impose a 100% tariff on nine countries including: Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates. Those would be contingent on the above BRICS countries agreeing not to create an alternative currency to the U.S. dollar.

If any of these are implemented, consumers will immediately feel the blowback. As costs for manufacturers and retailers go up, they will be passed on to consumers. Major companies like Walmart, Lowe’s, Best Buy, and AutoZone have already stated that they are raising prices next year to prepare for the increases. As can be seen from the list of companies above, these will impact every industry, not just one. While not every company has decided on raising prices, they will have to at some point next year. Some businesses may try to move their manufacturing out of heavily tariffed countries, yet even that will be costly, and consumers would see higher prices. According to a CSG analysis, the effects could lead to a nearly $200 billion decrease in the GDP while increasing the Consumer Price Index by 1.67% through 2026 alone. This could all lead to a very volatile market next year.

We already know from the results of 2024 that consumers have not been pleased with the prices of goods and services. If it was hard to convince people to spend under our current circumstances, then major retailers hiking prices are going to have a catastrophic effect on spending. We can never be sure that Trump will follow through with 100% of his plans, yet we already know that even the possibility of them is causing price fluctuations.

For suppliers and manufacturers, it is imperative to start reaching out to the buyers and purchasing decision makers right away. Chains are already procuring goods in advance to take advantage of the current prices before they go up. Reach those contacts immediately with Chain Store Guide’s sales leads databases, connecting you with the right people right now.