How will Trump's tariffs hit your wallet? What to expect on everyday price tags.

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Tariffs on China are still on course to begin Tuesday while there's been a reprieve of one-month or more for 25% tariffs on Canada and Mexico from the Trump administration.

But as things change quickly around potential implementation of tariffs on imported goods, U.S. consumers have been worrying and preparing for the hit to their wallets and retailers have been scrambling to figure out how to plan for the 25% tariffs on Canada and Mexico and 10% tariffs on goods from China.

Tariffs have been a focus for US retailers

Everyone was buzzing about tariffs at a Washington, D.C., event with major U.S. retailers in early December. Then President-elect Donald Trump's proposed tariffs on China, Canada and Mexico had, at that point, been well established.

"We exclusively talked about this topic of tariffs," Balika Sonthalia, a partner and practice leader of strategic operations, Americas, at global strategy and management consultancy firm Kearney, told USA TODAY.

In addition to immigration policies, tariffs have retailers worried that “the combination of the two can put a lot of sectors in between a rock and a hard place,” she said. And with Trump repeatedly vowing tariffs were coming – and doubling down in early January after the Washington Post reported he might scale them back – U.S. retailers and consumers weren't waiting to prepare.

Retailers are trying to learn “what exactly they are walking into,” said Sonthalia, whose specialty for Kearney is consumer products and retail and distribution clients. 

Here's the latest on Trump tariffs

On Trump's first full day in office, as previously reported by USA TODAY, the president said he would levy a blanket duty of 25% on both Mexico and Canada starting Feb. 1 unless the U.S. neighbors toughen security at their borders. Trump said both nations have illegal migration and drugs flowing across their borders with the U.S. He also said he was also looking at a 10% tariff on China.

The new date for the tariffs to take effect was Tuesday, Feb. 4. But Monday morning, Mexico and the United States reached a one-month agreement to stave off tariffs and a looming trade war. President Donald Trump announced late Monday that he was pausing tariffs on Canada for at least 30 days after a phone call with Canada's Prime Minister Justin Trudeau.

The tariffs on goods from China still appeared on course to begin Tuesday.

In a published note last week, Morgan Stanley Economist Michael Gapen said tariffs could be used as a negotiating tool with Mexico as the U.S.-Mexico-Canada agreement is under review in the first half of the year.

"The President's suggestion that tariffs on Mexico/Canada could come by Feb. 1 remind us that vigilance is warranted as the U.S. policy path could evolve quickly," Gapen said.

Gapen also said effects of the tariffs will be felt through 2025 and 2026 with the "tariff shock" being over in the second half of 2026.

'Another form of inflation, just spelled differently'

The tariffs could cost consumers an additional $2,500 to $7,600 a year per household, according to estimates, said Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation, in an interview in December.  

Consumers ultimately will pay for any tariffs that are put in place, said Darpan Seth, CEO of Nextuple, which helps build and support programs to help its clients get products for consumers in stores or online. The firm's client list includes major U.S. retailers like Dick's Sporting Goods and luxury brands such as Kate Spade and Coach.

“For consumers, tariffs are like another form of inflation, just spelled differently,” Seth said. “They have the same effect of rising prices.” 

Some consumers are going to delay major purchases or make smaller repairs if prices go up for imported goods from certain countries, he said. For example, a consumer “may want to do a quick fix instead of trying to change the carburetor in your car,” Seth said. 

Retailers dealing with tariffs will have no choice in the short term but to increase prices, Seth said. 

US retailers are worried about tariffs

Gold and other industry sources say even though the Trump administration threatened tariffs on imports during Trump's first administration – and followed through on some – things are different this time.  

There’s a lot of concern among retailers represented by the National Retail Federation, (NRF) which includes both large and small businesses, Gold said. 

“There’s so much complexity in the supply chain and so many challenges in the supply chain as it is, to have something as big as these massive tariffs, is really causing disruption in itself and folks trying to figure out ‘What am I supposed to do?'" Gold said.

Since there were been several different scenarios of tariffs being discussed, retailers have been trying to come up with plans to address them all, he said.

How will tariffs impact consumers?

An NRF study looked at the estimated impacts of the tariffs on six consumer product categories: apparel, toys, furniture, household appliances, footwear and travel goods. 

Retailers rely heavily on imported products and manufacturing components to offer customers a variety of products, Gold said.  A tariff is a tax paid by the U.S. importer, not by a foreign country or the exporter, he added.

The NRF said while some U.S. manufacturers could benefit from the tariffs, the gains to U.S. producers and the Treasury from tariff revenue do not outweigh overall losses to consumers. 

According to NRF, some examples of potential price increases with tariffs include: 

• A $40 toaster oven would cost consumers $48 to $52.
• A $50 pair of athletic shoes would cost $59 to $64.  
• A $2,000 mattress and box spring set would end up costing $2,128 to $2,190.  

Higher prices and loss of spending power would hit low-income families especially hard, the retail federation said in its study, released on Nov. 4. 

Gold said while the NRF looked at six specific categories, he also believes pricing for consumer electronics, pet products, children’s products and groceries, could be hit hard by the proposed tariffs. 

Still, there's some optimism. Financial advisors previously told USA TODAY Trump's tariffs during his first term didn't cause "significantly high inflation." And Trump's administration remains steadfast on the benefits of tariffs.

“President Trump has promised tariff policies that protect working Americans from the unfair practices of foreign companies and foreign markets," said Brian Hughes, Trump-Vance transition spokesman said earlier this month. "As he did in his first term, he will implement economic and trade policies to make life affordable and more prosperous for our nation, while simultaneously leveling the playing field for American manufacturers.”

How are US retailers reacting and preparing for tariffs? 

Some retailers are looking at sourcing differently while others are putting in contingency plans, said Neil Saunders, a retail analyst at the research and analytics firm GlobalData. 

The retail federation’s retail members are trying to prepare for the best – and worst-case − scenarios, Gold said. 

Larger U.S. retailers have more ability to “mitigate and shift their sourcing,” Gold said. He added those shifts can't happen overnight. Smaller mom-and-pop stores and medium-sized retailers don’t have as much flexibility, he said. There's even worry the tariffs might cause some smaller retailers to go out of business, Gold said.

There have already been signs that consumers and retailers reacted to potential price increases and tariffs. According to the Wall Street Journal, some retailers during Black Friday ran advertisements for things like electronics, washing machines and refrigerators before prices increase due to tariffs. Seth said sales figures from Black Friday and Cyber Monday have shown that purchases in those categories went up...

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