Trump Tariffs Could Drive Up The Cost Of These Goods After August 1 Deadline

Forbes

a day ago

Topline
Trump's so-called reciprocal tariffs are scheduled to go into effect on August 1 after a 90-day delay—just as American families begin back-to-school shopping—and could hike up the cost of consumer goods imported from other countries.
Back-to-school shoppers could see higher prices on new clothing, shoes, and computers. Copyright 2025 The Associated Press. All rights reserved
Key Facts
Price increases due to tariffs could cost households on average an extra $2,700 in 2025, the Yale Budget Lab predicted in their most recent analysis published after the Trump administration announced trade deals with Japan, Indonesia, and the Philippines this week.
The tariffs set to begin in August are the reciprocal tariffs Trump first announced during his April 'Liberation Day' event, which have been repeatedly delayed in the months since.
The Trump administration has been rolling out new tariff rates for individual countries as they try to negotiate trade deals.
Major U.S. trade partners will face significant tariff rates, including a 35% tariff on Canadian imports and a 30% tariff on the European Union.
Ernie Tedeschi, Yale Budget Lab's director of economics, told Forbes: 'The back to school experience I think is going to be particularly exposed to tariffs this year,' noting many of the goods parents and students want are imported from countries facing relatively higher tariffs like China.
Trump suggested tariff rates would not go below 15%, telling the crowd at an AI summit Wednesday that countries would face a 'straight, simple tariff of anywhere between 15% and 50%,' reserving the higher rates for countries 'we haven't been getting along…too well.'
Crucial Quote
'These tariffs are more likely to impact low income families,' Tedeschi said. 'This is one of the reasons why tariffs are what we call a regressive tax, a tax that hurts lower income families more than higher income families. It's not just that lower income families spend a greater share of their income, it's that they are more likely to buy imports from the countries that are being tariffed more heavily here, in particular China.'
How Will Tariffs Impact Back-To-School Shopping?
Prices of big ticket items on school shopping lists like computers and electronics are expected to rise 20.5% in the short term, Tedeschi told Forbes.
to rise 20.5% in the short term, Tedeschi told Forbes. A staggering 40% increase on leather goods, a broad category that includes shoes , footwear , and handbags, could also be in store, according to Yale Budget Lab predictions—Tedeschi said shoes and handbags were 'particularly exposed' to incoming tariffs: 'In some cases, shoes are assembled in the United States. But even in those cases a lot of times, they are using fabric and parts that come from overseas.'
, , and could also be in store, according to Yale Budget Lab predictions—Tedeschi said shoes and handbags were 'particularly exposed' to incoming tariffs: 'In some cases, shoes are assembled in the United States. But even in those cases a lot of times, they are using fabric and parts that come from overseas.' Clothing costs are also expected to rise 36% in the short term as the U.S. imports a large portion of its inexpensive shoes and apparel from China (facing a 30% tariff rate scheduled to go into effect August 12, although Treasury Secretary Scott Bessent said this deadline would likely be extended.)
Will Tariffs Impact Food Prices?
General food prices are expected to rise by about 3.7% in the short term, according to the Budget Lab, but fresh produce could spike in price by 6.7%. 'It's nearly two years worth of inflation happening over and above what we would have gotten otherwise,' Tedeschi said.
could spike in price by 6.7%. 'It's nearly two years worth of inflation happening over and above what we would have gotten otherwise,' Tedeschi said. Coffee prices are widely expected to rise: Brazil is the world's largest coffee producer, and the U.S. imported an estimated 35% of its coffee beans from the South American nation in 2023, according to the USDA, but the country faces one of the highest tariff rates (50%) as Trump tries to pressure the Brazilian government to end the prosecution of former President Jair Bolsonaro.
prices are widely expected to rise: Brazil is the world's largest coffee producer, and the U.S. imported an estimated 35% of its coffee beans from the South American nation in 2023, according to the USDA, but the country faces one of the highest tariff rates (50%) as Trump tries to pressure the Brazilian government to end the prosecution of former President Jair Bolsonaro. The U.S. is the largest rice importer in the Western Hemisphere, according to the USDA, largely buying aromatic rices including jasmine rice from Thailand (facing a 36% tariff) and basmati rice from India and Pakistan (tariffs originally set at 26% and 29% in April, respectively).
importer in the Western Hemisphere, according to the USDA, largely buying aromatic rices including jasmine rice from Thailand (facing a 36% tariff) and basmati rice from India and Pakistan (tariffs originally set at 26% and 29% in April, respectively). Notably, the Trump administration said Japan would start buying more American rice as part of the trade deal announced on Tuesday night. However, Japanese Prime Minister Shigeru Ishiba also said his country 'made absolutely no sacrifice in the agricultural sector.' Last year, that accounted for 770,000 metric tons of rice, with about 45% coming from the U.S., Reuters reported.
The majority of wine imported to the U.S. comes from nations in the European Union, including France, Italy, and Spain, and the EU faces a 30% tariff starting in August, but negotiators are reportedly working on a deal to lower this rate.
imported to the U.S. comes from nations in the European Union, including France, Italy, and Spain, and the EU faces a 30% tariff starting in August, but negotiators are reportedly working on a deal to lower this rate. Other food prices are rising, including chocolate , but it's currently unclear what impact tariffs will have on their prices: Hershey's announced it would raise prices but the price hikes were 'not related to tariffs or trade policies' and instead caused by supply shortages in Ghana and the Ivory Coast, which produce about 60% of the world's cocoa.
, but it's currently unclear what impact tariffs will have on their prices: Hershey's announced it would raise prices but the price hikes were 'not related to tariffs or trade policies' and instead caused by supply shortages in Ghana and the Ivory Coast, which produce about 60% of the world's cocoa. Trump initially proposed a 21% tariff rate for Ivory Coast in April, but eventually backed off and Hershey's has asked the Trump administration for an exemption from tariffs on cocoa, Bloomberg reported on Tuesday.
Beef prices have reached historic highs this summer due to factors including shrinking cattle herds and droughts, NBC News reported, but the U.S. still imports some beef, and the largest percentage comes from Brazil—the world's largest beef exporter now facing a 'cold' market in the U.S. following the Trump administration's announcement of 50% tariffs, Reuters reported last week.
Will Car And Auto Part Prices Rise?
The average price of a new car in April was $48,422—a 2.2% increase from April 2024, according to Edmunds, who noted in a recent report that the current tariff impact on the market has been 'muted.'
However, the Budget Lab is now predicting that upcoming tariffs will raise car prices by about 13.1%—an increase of $6,300 on that average.
by about 13.1%—an increase of $6,300 on that average. Motor vehicle parts are also expected to rise 17.3%.
are also expected to rise 17.3%. 'Obviously foreign cars are going to be more exposed to tariffs than domestic cars,' Tedeschi said. However, Tedeschi also noted that American cars have 'a lot of foreign parts that go into them.
'The brand with the highest domestic content is Tesla. And that is 80% domestic, which means that a fifth of the car is foreign, and those foreign parts are tariffed too,' Tedeschi said. 'People should not think that they can just avoid the tariff if they buy domestically.'
What To Watch For
The Yale Budget Lab breaks down the projected price increases from tariffs to price increases in the immediate future and prices in five to 10 years' time, 'after consumers and businesses have time to substitute for other things, and production worldwide has a chance to shift and reoptimize around the tariffs,' Tedeschi said. This reoptimization could include businesses reshoring production to America or shifting production to countries with lower tariff rates.
Big Number
$2.9 trillion. That's how much Trump's tariffs are expected to raise in the next decade, according to the Budget Lab. The Tax Foundation made a similar projection last week, predicting that the levies would raise $2.5 trillion assuming all of his levies stand up to court challenges.
Key Background
One week after rolling out the new tariff regime on 'Liberation Day,' the Trump administration announced a 90 day pause on their enactment, giving individual nations time to negotiate new trade deals with the U.S. and promising '90 deals in 90 days.' However, during the three-month pause the administration only secured trade deals with three nations—China, Vietnam, and the U.K., prompting Trump to push the deadline back again. In the weeks since the second pause, Trump has announced more major deals with key trade partners—most recently with Japan, who negotiated down a 25% tariff announced in April to 15%.