US consumers to bear brunt of Donald Trump's reciprocal tariffs: Here's what could get expensive
ByHT News Desk | Edited by Nikita Sharma
Apr 03, 2025 06:58 AM IST
President Trump's new reciprical tariffs on countries including China and India, may lead to higher prices for American consumers.
As the end approached for the April 2 deadline set by United States President Donald Trump to impose reciprocal tariffs across the globe in order to what he believes will reform global trade, it was made clear that every import in the US will face a base tariff of 10 per cent. In addition, Trump announced harsh reciprocal tariffs on as many as 60 countries including India, China, Vietnam, Indonesia, many others as well as the European Union.
US President Donald Trump holds a signed executive order on tariffs, in the Rose Garden at the White House in Washington DC, US, on April 2, 2025.(File/REUTERS)
US President Donald Trump holds a signed executive order on tariffs, in the Rose Garden at the White House in Washington DC, US, on April 2, 2025.(File/REUTERS)
While the President has said that he did what he did to help the American economy, the cost of such tariffs might eventually have to be borne by the American consumers.
Also read: Donald Trump announces 26% tariff on imports from India: ‘A great friend but…’
Several of the countries which faced the high reciprocal tariffs were responsible for huge chunks of imports in the US. Many American companies have set up their manufacturing units in these countries, while many others import products from them to sell in the US market.
The companies which will face such tariffs will most likely either increase the price of their products to make up for paying high duties, or decide to stop importing. The latter may cause a shortage of products in the US’ local market, eventually leading to price hikes.
"For all of President Trump's talk of a new 'golden age,' this huge tax increase will inevitably result in higher prices for American families, lower growth and business investment, and diminished exports and manufacturing output as the country's factories face retaliation abroad and costlier inputs (roughly half of all imports) at home," CBS News quoted Scott Lincicome and Colin Grabow, trade experts at the Cato Institute as saying.
Also read: Trump reciprocal tariffs chart: China tops list, India and EU over 20% - Check here
While some exclusions including products such as semiconductors, pharmaceuticals and critical minerals have been made, they are still at the risk of facing high import duties in the US in future.
What could get expensive for US citizens?
iPhones, TVs, other electronics
The iPhones are majorly manufactured in China, and more recently, Apple had shifted a fraction of its manufacturing unit in India. Both the countries are at the receiving end of high reciprocal tariffs by the US. While China now faces 34 per cent reciprocal tariffs, the figure for India is 26 per cent, which Trump said was “discounted”. Such high tariffs could lead to an increase in the price of Apple products in the US.
“Apple produces basically all their iPhones in China and the question will be around exceptions/exemptions on this tariff policy if those companies are building more operations/factories/plants in the US," said Wedbush analyst Dan Ives in a research note, according to the CBS News report.
Along with China, Taiwan and South Korea - which are some of the biggest electronic exporters to the US, will also face reciprocal tariffs. This could add to the prices of several electronic goods for the US consumers.
Cars, automobiles
Many car manufacturers in the US depend on other countries for parts. These imports will also face the universal tariff of 10% and the previously announced 25 per cent tariff on auto imports, potentially leading to a hike in car prices.
However, Canada and Mexico are immune to the new tariffs on car parts, for now at least.
The prices for cheapest American cars could go up to $2,500-$5,000, and for some imported models, it could be as high as $20,000, CBS News reported citing Anderson Economic Group.
Alcohol
Modelo and Corona, two of some of the most popular beer brands in the US, could get more expensive since they are imported. Since 64.1 per cent beverages in the US are poured out of cans, according to a BBC report citing the Beer Institute, beers such as Modelo could also face the aluminium tariff. This tariff includes canned beer.
European spirits such as Italian, French, Spanish wines, German beer, and Scottish whisky could also get expensive as the European Union and the United Kingdom will also face tariffs.
Coffee, chocolate, Avocados
US’ reciprocal tariffs on Latin countries could lead to a price hike in coffee, chocolates and Avocados. According to the US Department of Agriculture, the US imports a huge chunk of coffee beans from Brazil and Colombo. Countries such as Cote d'Ivoire and Ecuador are exporters of cocoa beans and the US depends on them since it can’t grow cocoa beans due to its climate, reported CBS News.
For Avocados, which has become an integral part of the breakfasts across the US, the country depends largely on Mexico.
All of these countries are facing increased tariffs by the US, which could lead to an increase in their prices.
Apparel, shoes
Many of the clothes sold in American stores such as Walmart, Target are not manufactured in the US. Countries such as China, Vietnam and Bangladesh export them, all of which are facing high US tariffs.
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