People shop at the Abercrombie & Fitch store in Midtown Manhattan on October 24, 2024 in New York City.
Spencer Platt | Getty Images
Former President Donald Trump's global tariff proposals could lead to higher prices for clothing, toys, furniture, appliances, shoes and travel goods, according to a new report from the National Retail Federation.
The study, released on the eve of Election Day, adds to a pile of economic and industry analyzes warning of the inflationary effects of the Republican presidential nominee's hard-line approach to trade.
Trump said he would impose tariffs of 10% or 20% on all imports in all areas. He also brought up a particularly high rate in China of between 60% and 100%.
In both cases, the NRF found that the impact of Trump's tariffs would be “dramatic” double-digit price hikes in nearly all six retail categories examined by the trade group.
For example, the analysis found that the cost of clothing could rise between 12.5% and 20.6%. This means that an $80 pair of men's jeans would instead cost between $90 and $96. A $100 coat? This will cost between $112 and $121.
These new prices would put pressure on consumer budgets, especially for low-income families who spend three times their monthly budgets on clothing compared to high-income families, according to the Bureau of Labor Statistics.
The report found that the largest increase in gaming prices could occur: between 36.3% and 55.8%. The price of the $200 crib will also rise to between $213 and $219.
At the macro level, these price increases would also erode consumer spending. The report found that more expensive retail goods would lead to a $46 billion drop in purchasing power if Trump imposed global tariffs and particularly high rates in China.
“Broad-based tariffs on the scale proposed by former President Trump would amount to a massive tax increase on American households because they pay more for all imports, reducing their purchasing power and thus significantly impacting their spending and the overall economy,” the president said. Mark Zandi, an economist at Moody's, told CNBC:
The report did not take into account Trump's new proposal, announced Monday, to impose a 25% tariff rate on Mexico if the country does not impose stricter border regulations, which he announced at his rally in Raleigh, North Carolina.
Vice President Kamala Harris has seized on economic criticism of Trump's broad tariff plans, calling them a “Trump sales tax” on American consumers. Instead, they prefer a more targeted approach to duties.
But many voters respond well to Trump's tariff proposals, feeling that years of free trade have decimated factory towns across America.
However, a nonpartisan working paper found that the tariffs imposed by Trump during his first presidential term, including duties on foreign metals and washing machines, failed to raise the overall number of jobs in related industries.
“If these imports from China are taxed higher, their production will shift to other less developed countries,” said Mary Lovely, a senior fellow at the Peterson Institute for International Economics.
Given the relatively high wages in the United States, Lovely said, “it is unlikely that many jobs will be created in these industries.”
This means that Americans will not see additional jobs but will see higher prices.
