Economists warn U.S. consumers to prepare for inflation despite Trump’s trade deals

The U.S. will now charge at least 15% on all imports, the highest level in decades, and President Trump says that if other countries don’t seal new deals by early August (mid‑August for China), tariffs will rise and push costs higher for businesses and shoppers.

Speaking at an AI-focused conference on Wednesday, Trump detailed this approach. He said the U.S. will impose a “straight, simple tariff” ranging from 15% up to 50%, adding that the lowest rate applies only to countries that deliver on their market‑opening commitments to American exporters.

If no new agreements are made, many countries could face higher tariffs starting August 1.

China, specifically, has until August 12 to secure a bilateral deal with Washington or risk steeper levies.

Companies nationwide have raised concerns, according to CBS News. They warn that elevated import fees would inflate operational expenses and ultimately lead to consumer-facing price hikes.

On Thursday, Nestlé, the global food conglomerate, revealed it may increase the price of candy bars and other sweets, citing fears that the new tariffs would cut its profit margins.

Also on Thursday, Italian luxury house Moncler said it has already adjusted its apparel prices upward to compensate for extra tariff expenses.

General Electric, in turn, estimated that next year’s duties might slice about $500 million from its bottom line in 2025. GE said it plans to manage the extra expense through “cost controls and pricing actions.”

Orange-juice distributor Johanna Foods filed a suit this week against the administration, contesting a planned 50% levy on Brazilian shipments. The New Jersey-based company argues such a duty would devastate its operations and compel it to raise shelf prices by up to 25%.

The administration maintains that U.S. firms and consumers will not shoulder the increased tariffs.

White House spokesman Kush Desai told CBS MoneyWatch, “The administration has consistently maintained that the cost of tariffs will be borne by foreign exporters who rely on access to the American economy, the world’s biggest and best consumer market.”

Desai also referenced a study from the Council of Economic Advisers, noting that import costs have decreased year‑to‑date.

Economists predict consumer prices will rise

Economists, however, warn that consumers may face steeper prices on everyday items later in the year, from leather accessories and apparel to gadgets and vehicles.

Capital Economics’ chief North America economist, Paul Ashworth, said, “Up to now, there has been only limited pass-through from tariffs into final consumer prices, but we still expect the impact to gradually mount in the second half of this year.”

He observed that many partners may be slapped with levies in the 15% to 20% range, while China could face steeper charges. He added, “We suspect retailers will be forced to finally raise the prices paid by consumers.”

Inflation at the start of 2025 stayed subdued, partly due to firms and consumers accelerating imports ahead of tougher tariffs. However, that cushion is projected to shrink as time passes.

Some sectors will feel tariff impacts more

Ernie Tedeschi, economics director at Yale’s Budget Lab, cautioned, “In the short term, sharply higher prices won’t show up evenly across all categories.” He noted that industries importing the largest volumes would see the most pronounced effects.

Yale’s research suggests that combining the 15% floor with additional, country-targeted tariffs could lift U.S. consumer prices by roughly 2% over two years. As Tedeschi emphasized, “This isn’t an instantaneous, ‘We wake up the next morning and the world is different.”

Once these elevated duties are integrated into global supply chains, certain categories could experience sharp spikes. Yale’s findings indicate that foreign-made leather footwear, bags and clothing might surge by 40% or more, with electronics costs rising over 20%.

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