Last year, then-President-elect Donald Trump touted a major plan during his campaign trail to impose tariffs, which are taxes companies pay to import goods from overseas, as soon as he takes office as president.
At the time, he specifically vowed to impose 25% tariffs on all goods from Mexico and Canada, 60% to 100% on all goods coming from China, and 10% to 20% on goods imported from all other countries to promote manufacturing in the U.S.
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“The higher the tariff, the more likely it is that the company will come into the United States and build a factory,” said Trump in an interview with Bloomberg News in October.
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Shortly after being sworn in as president on Jan. 20, he doubled down on those plans, warning that he would impose 25% tariffs on all goods from Mexico and Canada and 10% tariffs on imports from China, starting on Feb. 1.
Some consumers have expressed concern that Trump’s tariff plan will result in higher prices for goods and services as companies usually pass down the extra costs associated with the tax to shoppers.
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Retail giants such as Walmart (WMT) , AutoZone (AZO) , Best Buy (BBY) and Dollar Tree (DLTR) have already warned consumers that they may have to hike prices due to Trump’s tariffs.
While Trump’s tariff plan has sparked worries about its impact on inflation, JP Morgan Chase (JPM) CEO Jamie Dimon has just given it the thumbs up.
Chase CEO issues blunt response to Trump's tariffs
The billionaire CEO claimed in a recent interview with CNBC that tariffs are “an economic tool” and “an economic weapon.”
“People arguing, is it inflationary and non-inflationary? I would put in perspective, if it’s a little inflationary, but it’s good for national security, so be it,” said Dimon. “I mean, get over it. National security trumps a little bit more inflation.”
Dimon also highlighted the importance of how the Trump administration will use these tariffs to accomplish its goals.
“The question is how they get used,” Dimon said. “Can they get, be used to bring people to the table? Yes. Is there some unfair trade? Yes. Is there some state-owned set subsidies? Yes. You know, is the president going to use that way in his team? Yeah, and we’ll see. But you know, how it gets played out, we’re going to find out.”
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Trump's tariffs can have unintentional consequences
In November 2024, the National Retail Federation warned that Trump’s tariffs would impact the price of products in categories such as apparel, toys, furniture, household appliances, footwear, and travel goods across the country. It is also estimated that his tariffs may reduce consumer spending by billions of dollars each year if they are in place.
Consumers are already prepared to switch gears on their shopping habits in response to Trump’s tariffs.
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According to a recent market pulse survey from InMoment, 56% of the survey’s respondents expect prices for goods and services to increase due to Trump’s tariffs. Over 50% expect prices for clothing, footwear, groceries, entertainment, home products, electronics, and gas to increase.
In response to these expected price hikes, 60% of respondents said they are contemplating changing their shopping behavior, with more expecting to shop less rather than more.
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