Spending

More tariffs are on the way: Here's how much money they could cost you

Twenty/20

Leaders from the U.S. and China are set to sit down Thursday for trade talks — just before more rounds of tariffs go into effect on October 15. If these talks go well, strategists say, upcoming tariffs could be postponed, and it's possible that a trimmed-down trade deal could lift some of the tariffs in place before the end of the year.

Ongoing trade disputes between the United States and other countries are costing American consumers and businesses. Tariffs imposed by the Trump administration have cost U.S. companies $34 billion between February 2018 and August 2019, according to a new analysis of government data from Tariffs Hurt the Heartland, a group of American businesses and trade associations.

On a personal level, the average household could see expenses rise $2,031 per year as a result of tariffs already in effect and those slated to go into effect by the end of 2019, according to a September report from the National Foundation for American Policy. That figure could jump to $3,614 if all threatened tariffs are imposed, it estimates.

Several rounds of tariffs are set to go into effect this month:

  • The U.S. is poised to impose new tariffs on $7.5 billion worth of goods from the European Union, after arbitrators from the World Trade Organization (WTO) approved those levies. The 25% tariffs, which go into effect October 18, will target a range of goods from countries like France, Germany, Spain, and the U.K, on products including aircraft, alcoholic beverages, cheese, pork products, and frozen meat.
  • Consumers can also expect higher prices due to another round of tariffs on Chinese goods scheduled to begin October 15. These will push the duties from 25% to 30% on products including furniture, handbags, and luggage.

Tariffs are taxes placed on imported products. Companies importing affected products pay the tariff, and in turn must often charge higher prices for the products to cover the higher importing costs. So individual Americans generally end up paying higher prices.

There could be still more tariffs on the way, too. The U.S. is still deciding whether or not to implement import taxes on foreign automobiles, which could add an additional 25% to the price of vehicles produced in Europe and Japan.

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How the pain of paying can affect your spending

How tariffs are affecting consumers

Even without the new round of tariffs on European goods, the trade war is already costing Americans hundreds, and maybe even thousands, of dollars. A family of four could pay an extra $767 to $2,389 each year for the products they buy, depending on how trade disputes play out, according to a February study from Trade Partnership Worldwide.

In June, the research firm warned that additional tariffs "would result in prices higher than many consumers would be willing to pay."

Things may get worse, too, as the E.U. is likely to respond with tariffs of its own, and as a result, consumers can likely expect to pay more for groceries and perhaps airline tickets. You'll also likely feel the effects of the new tariffs on E.U. products this holiday season, as prices for goods like wine and cheese may increase by as much as 25%.

But if you stock up now, you may be able to save some money, according to Steve Millard, SVP of merchandising and operations at Murray's Cheese. "It will take some time for these increases to make their way through the supply chain," Millard recently told Grow.

Given that there hasn't been much progress in settling these trade disputes, consumers should plan for price hikes. That may mean cutting your spending in advance or otherwise retooling your budget to anticipate a costlier shopping season. You may also want to hold off on any bigger purchases, like appliances, as they may jump considerably in price, or consider buying them secondhand.

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