Remember when you thought inflation was bad? Well, buckle up buttercup, because tariffs are about to crash the party like that friend who shows up uninvited and eats all your snacks.
Here’s the deal: Trump’s back in office and he’s throwing around tariffs like confetti at a New Year’s party. We’re talking a blanket 10% tax on basically everything that crosses our borders, plus some extra special sauce for specific countries and products. Cars, electronics, that fancy coffee maker you’ve been eyeing – they’re all getting the tariff treatment.
Now, here’s where it gets interesting (and by interesting, I mean expensive). Goldman Sachs just dropped some numbers that’ll make your credit card weep. Right now, us regular folks are only eating about 22% of these tariff costs. The rest? American businesses are basically playing financial Jenga, absorbing 64% of the pain while foreign companies are cutting their prices by 14% just to stay in the game.
But plot twist: this isn’t going to last. By October – you know, right before holiday shopping season because the universe has a sense of humor – consumers could be on the hook for 67% of tariff costs. That’s like going from paying for appetizers to covering the entire dinner bill.
The Goldman folks did their homework, crunching numbers through June, and found that stuff like household appliances and computers have already gotten 7.5 percentage points more expensive than they would’ve been without tariffs. Your laptop upgrade just got a lot less appealing, didn’t it?
Companies like Adidas and Walmart have already thrown in the towel and announced they’re hiking prices. When Walmart – the king of “everyday low prices” – starts raising prices, you know things are getting real.
The Federal Reserve’s favorite inflation measure (Personal Consumption Expenditures, or PCE for those keeping score at home) is already feeling the heat. Tariffs have bumped it up by 0.20 percentage points, with more pain coming down the pipeline. Goldman expects core PCE inflation to hit 3.2% by December – that’s way above the Fed’s 2% target and significantly higher than the 2.4% it would be without tariffs.
Here’s the kicker: the federal government has already collected over $100 billion from customs duties this year. As Deutsche Bank so eloquently put it, that’s proof that “someone is paying” for these tariffs. Spoiler alert: that someone is increasingly going to be you.
So what’s the bottom line? That holiday shopping list you’ve been working on? You might want to start shopping early, because by the time Black Friday rolls around, those “deals” might just be regular prices from six months ago. The tariff train has left the station, and your wallet is tied to the tracks.
The moral of the story? Trade wars aren’t just fought with policy papers and diplomatic meetings – they’re fought in checkout lines and credit card statements. And right now, American consumers are about to find out what it really costs to “win” a trade war.