How Trump’s expanding tariffs are starting to hit the wallet

How Trump’s expanding tariffs are starting to hit the wallet

In the early phase of US President Trump’s trade war, many US businesses absorbed the costs of new tariffs, hoping to ride out the uncertainty without losing customers. But as Trump’s administration moves ahead with more sweeping tariffs some set to take effect as early as next week companies are warning that those protections are no longer sustainable. As a result, prices for everyday goods are starting to rise, the New York Times reported.

From corporate earnings calls to store shelves

Major companies like Procter & Gamble, Adidas, and Carter’s have now publicly admitted that they are either raising prices or preparing to do so. Procter & Gamble is increasing prices on roughly a quarter of its US products, while flooring giant Mohawk Industries is hiking rates by 8 percent. Many cite tariffs directly as the cause, warning that if rates go even higher—as they are expected to under Trump’s newly announced round—more aggressive price increases will follow.

Early cushioning is running out

Until now, the full effect of tariffs was delayed for several reasons. Many firms had stockpiled goods before duties kicked in. Retailers placed advance orders that arrived before tariff hikes took effect. And some companies chose to cut profit margins rather than risk driving customers away. But with inflation still rising—especially on tariff-heavy items like appliances and toys—those buffers have been exhausted.

Tariffs may now begin to feed inflation

Although inflation has remained relatively muted so far, economists say we are entering a turning point. Jerome Powell, the US Federal Reserve chair, acknowledged this week that price increases from tariffs may unfold more slowly than expected, but they are starting to appear more clearly in the data. A 3 percent average rise in imported goods since March—larger on Chinese goods—suggests the pass-through effect is gaining steam.

Small businesses feel the squeeze too

Large companies aren’t alone. Smaller retailers and cafés, especially those affected by Trump’s steep new tariffs on Brazil, are reluctantly adjusting prices to survive. The 10 percent blanket tariff many could once absorb is now being replaced by 50 percent levies—too high to ignore. With the holiday season approaching, many small and midsize businesses are preparing to raise prices more noticeably.

Uncertain future for consumers

Whether these price increases mark a temporary spike or a more lasting trend remains unclear. But most economists agree: if tariffs persist, American consumers will ultimately bear the cost. As Harvard economist Alberto Cavallo puts it, “Eventually, Americans will end up paying most of the cost of these tariffs.”