President Donald Trump has implemented unprecedented tariffs on global imports into the United States, triggering fears of a recession and of increased prices for consumers.
While the Trump administration has said that the tariffs will ultimately prove beneficial to U.S. consumers and industries, economists have expressed skepticism about the idea, saying that the haphazard nature of the rollout of tariffs and the retaliatory tariffs from other countries could have significant consequences for the American economy.
On a day-to-day level, Americans are likely concerned about the potential impacts on prices for consumer goods, including automobiles, household products and fruits and vegetables. Economists have also expressed concern that the haphazard nature of the implementation of tariffs could destabilize markets and lead to a recession.
Things took another turn Wednesday as Trump again raised tariffs on China while pausing additional tariffs on at least 75 other countries that he says have reached out to negotiate trade deals with the U.S.
The move still left in effect a blanket 10% tariff that Trump had implemented on Canada and Mexico, two of the country's biggest trade partners.
How long will it take for such price hikes to occur, and how are companies responding? Here’s what we know.
How long will it take before prices rise due to tariffs?
Chicago Politics
There is universal agreement that tariffs will cause consumer prices to rise, though there is disagreement over how much those prices could go up and how long those increases will last.
While there may be some companies that could raise prices immediately, most experts say there is no justification for such a move as the tariffs go into effect.
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Joshua Smith, an associate professor at Trevecca Nazarene University, said that increased costs could occur within the next month or two, especially on perishable goods, according to NBC affiliate WBAL.
“Meat prices (for example) might go up in beef jerky, and that might take a few months from now because it needs to be processed in the plant and moved through,” he said.
Part of the reason for the delay is an “on-the-water-clause” released by U.S. Customs, saying that cargo currently on ships heading toward the United States will not be subject to the increased tariffs implemented by the Trump administration.
Any goods that are sent after the tariffs went into effect will be subject to those levies and could see their prices increase.
CNBC’s Lori Ann LaRocco said that price hikes are coming due to the tariffs, there is “no justification” for companies to raise prices now.
“If companies start citing President Trump’s new tariffs in price hikes today, they’re taking advantage of the situation,” she wrote. “That’s based on the way customs enforcement works and how long it takes for products from overseas to move through the global supply chain.”
Tom Barkin, president of the Richmond Federal Reserve, said that higher prices likely won’t show up until summer.
"For the most part, there is enough inventory that we're talking about June prices more than we're talking about April prices," he said, as companies typically have 30 to 60 days' worth of pre-tariff inventory to work through,” he told Axios in an exclusive interview.
He also told the publication that Memorial Day sales could be impacted, as companies will be less likely to reduce prices on goods because of a dwindling supply of pre-tariff-produced goods.
What could also impact prices on goods will be whether tariffs remain in effect on specific countries, with the Trump administration repeatedly pausing certain levies and implementing others.
Wednesday saw another change of direction, as Trump announced that he would pause tariffs on approximately 75 countries that have offered to negotiate trade deals with the White House. He also further raised tariffs on China, saying that the country "lacked respect" for world markets in instituting reciprocal tariffs.
How will different industries be impacted?
A slew of industries will be impacted by the tariffs, with most of the focus on the agricultural and automotive industries.
According to experts at the University of Chicago, approximately 60% of U.S. vegetable consumption is expended on products from Mexico, and 25% of the crude oil processed by U.S. refineries comes from Canada.
The impacts of those tariffs, along with levies on products like steel, will be felt across multiple industries in a cascading fashion, causing the impacts of the tariffs to be felt on a wider scale.
Food prices could be among the first to go up, according to experts, but industries like the automotive sector could take longer for impacts to be felt, as inventories have already been scaled up and demand for parts won’t outstrip supply for at least several months, according to researchers.
Ultimately though, long-lasting tariffs could have impacts, and different companies are exploring different ways to approach them.
According to Car and Driver, Audi and Volkswagen both plan to halt all imports to the U.S. BMW will plan to cover tariff costs on all vehicles built in Mexico, but only temporarily, according to dealerships. Ford is bringing back an “employee discount for everyone” program to help lower prices for consumers, according to Fox Business, and Hyundai has pledged not to increase vehicle prices for at least two months, according to Autoweek.
Could the moves lead to a recession?
The Trump Administration insists that they are not currently planning for a recession, and that stock markets are experiencing temporary corrections and will ultimately recover quickly.
Treasury Secretary Scott Bessent said the economy would be “back to firing on all cylinders” soon in an interview on Fox Business.
Still, most economic experts think a recession is highly possible.
“Simultaneous shocks to consumer sentiment, corporate confidence, trade, financial markets as well as to prices, new orders and the labor market will tip the economy into recession in the current quarter,” said Joe Brusuelas, chief economist at the consultancy RSM, according to the Associated Press.
The U.S. will also have to deal with other countries implementing their own tariffs. The European Union has implemented retaliatory tariffs on up to $23 billion in U.S. goods in response to levies on imported steel and aluminum. China also implemented a retaliatory tariff on American goods, pushing it up to 84% to match the tariffs implemented by the Trump administration, and says that they will hold a hard line on any negotiations with the U.S.
“If the U.S. truly wants to resolve issues through dialogue and negotiation, it should adopt an attitude of equality, respect and mutual benefit,” said Ministry of Foreign Affairs spokesman Lin Jian on Wednesday, according to the Associated Press.
