The latest wave of Trump tariffs is set to take effect on August 7th. Even if companies attempt to shoulder part of the cost, they may still pass expenses on to consumers. Prices of major imported goods such as computers, electronics, watches, clothing, shoes, and alcohol are the most likely to rise. Goldman Sachs estimates that consumers will feel the 'pain' within eight months.
On July 31, Trump announced new reciprocal tariffs, with nearly 70 countries facing tax rates ranging from 10% to 41%. CNN listed products that could become more expensive due to this large-scale tariff increase. According to the Consumer Price Index (CPI), computer prices in June this year were up nearly 5% compared to the same period last year.
Electronic Products Set to Rise by 18.2% in the Short Term
Yale University’s Budget Lab estimates that if Trump’s new tariffs are implemented indefinitely, computer and other electronics prices could rise by 18.2% in the short term (over the next 2 to 3 years) and 7.7% in the long term (within 3 to 10 years).
Much like electronics, the U.S. also imports large quantities of clothing, with main exporters including China, Vietnam, Bangladesh, India, and Indonesia. Considering apparel is one of America's most imported goods, tariffs imposed on these countries by Trump will impact clothing costs. Yale’s Budget Lab estimates that clothing prices could jump 37.5% in the short term and 17.4% in the long term.
Clothing Prices May Rise by 37.5%
Additionally, watches are one of Switzerland’s main exports to the U.S., with Swiss watch exports to the U.S. exceeding $4 billion (17.11 billion ringgit) last year. Switzerland will face a 39% tariff.
Vietnam and Indonesia are major footwear producers. Starting next week, tariffs on these two countries will be at least 19%.
According to the Wine & Spirits Wholesalers of America (WSWA), imported wine and spirits account for 35% of the total U.S. alcohol market sales. The EU, a major supplier of alcoholic beverages like wine, whiskey, and vodka, will face a 15% tariff as of the 7th.
Furniture and Toys Bound to Become More Expensive
Vietnam is the largest source of imported furniture for the U.S., followed by China. China and Vietnam are also the top two exporters of toys to the U.S. Under the shadow of tariffs, Chinese toy brands have already warned of price increases; higher U.S. tariffs on Vietnamese goods may add further pressure.
Since businesses have anticipated higher tariffs, many companies have spent months stockpiling inventory and have yet to fully pass tariff costs onto consumers. As a result, Goldman Sachs economists estimate that the rise in imported consumer goods costs will take eight months to be 'fully reflected in consumer prices'.