Which products in Wisconsin could become more expensive under Trump's tariffs?
With six weeks until President-elect Donald Trump begins his second term, his recently announced tariffs are at the forefront of the minds of economists and consumers alike.
Delivering on campaign promises, Trump has said he will sign an executive order his first day in office to impose a 25% tariff on all imports from Mexico and Canada, as well as a 10% tariff on Chinese products “above any additional tariffs.”
The proposed tariffs in part aim to curb illegal immigration and the flow of drugs into the U.S., Trump said. The incoming administration also hopes these taxes would boost domestic manufacturing and bring new companies to the U.S.
However, many economists believe the tariffs could cause imported products to become more expensive, while other experts say they don’t doesn’t necessarily mean a price spike.
Here’s what to know about how Wisconsin could be impacted.
What are tariffs?
Tariffs are taxes that one country imposes on another country for imported goods, according to the Tax Foundation.
There are two common types of tariffs. “Ad valorem” tariffs, which the Council on Foreign Relations says are the most common, are charged as fixed percentages of the value of imports. “Specific tariffs” are charged as fixed amounts on each imported good.
While tariffs are meant, in part, to de-incentivize foreign manufacturing, consumers often end up footing the brunt of the cost.
What products could cost more?
If prices do go up, a range of commonly used products could be impacted. Here are a few of them:
Dozens of imported grocery products could see a price spike. Plus, nearly 78% of vitamin imports come from China, according to the American Feed Industry Association.
A November report from the National Retail Federation also identified more than 500 imported clothing items that could see a cost increase. Aside from clothing, CBS reported that 99% of footwear in the U.S. is imported from other countries, citing the Footwear Distributors and Retailers of America.
Several auto manufacturers, including General Motors and Stellantis, have plants in the countries the Trump administration is planning to tariff, which could drive up the price of cars, Newsweek reported.
Additionally, gas prices across the U.S. — including in Wisconsin — may rise. The potential spike would be caused in particular by the 25% tariff on Canada, as several regions rely on Canadian oil.
Patrick De Haan, head of petroleum analysis at GasBuddy, told the Journal Sentinel the tariffs could potentially cause a “35 cent a gallon increase” in Wisconsin “during normal times.”
During summer months, De Haan said drivers could see a potential increase of “35 to 75 cents a gallon,” since that is when Wisconsin switches to a lower butane gas formula.
What companies have spoken out about the potentially higher prices?
Several major retailers have already confirmed their prices will likely increase under the Trump tariffs.
As of Dec. 4, the following companies have commented on the forthcoming tariffs:
Walmart
Last month, Walmart CFO John David Rainey told CNBC that there “probably will be cases where prices will go up” for the massive retail corporation, though he said it’s too soon to say which products will be affected.
In Wisconsin, Walmart operates close to 90 stores statewide.
Ikea
Jesper Brodin, CEO of the company that controls most Ikea stores, told CNN that it will be difficult for the furniture chain to keep prices low amid tariffs.
Ikea, which manufactures most of its goods in Europe, operates more than 50 stores in the U.S. The chain’s only Wisconsin location is in Oak Creek.
Lowe’s
On an earnings call last month, Lowe’s CFO Brandon Sink said about 40% of the company’s costs for producing goods comes from outside the U.S., CNBC reported.
Sink reportedly said tariffs “certainly would add product costs” for the home improvement store chain, though “timing and details remain uncertain at this point.” Lowe’s operates four stores throughout Wisconsin, according to its store locator.
Stanley Black & Decker
In an October earnings call, Donald Allen, CEO and president of tool manufacturer Stanley Black & Decker, said “coming out of the gate, there would be price increases associated with tariffs” if Trump were to impose them.
If tariffs were implemented, Allen said the company also has a longer-term plan to potentially move some of its production out of China — one of the main countries Trump plans to target with his tariffs.
However, while Trump has said increasing domestic manufacturing is a key goal of the tariffs, Allen said the company would likely move production “to other parts of Asia, maybe to Mexico.”
“[It’s] unlikely that we're moving a lot back to the U.S. because it's just not cost effective to do,” he added. “And there's questions about whether we even have the labor to actually do that in this country.”
AutoZone
AutoZone, the largest retailer of auto parts in the U.S., expects to raise its prices if Trump implements another round of tariffs, CEO Philip Daniele said on a September earnings call, according to Business Insider.
Though prices would gradually settle back down over time, Daniele said the company will initially "pass those tariff costs back to the consumer,” Business Insider reported.
AutoZone operates dozens of locations in Wisconsin, including 12 in the Milwaukee area alone.
Columbia Sportswear
Columbia Sportswear, the global sportswear brand, has spoken out against Trump’s tariffs since the incoming president’s first term. More recently, Timothy Boyl told The Washington Post in October that the company was "set to raise prices.”
The Columbia brand is sold at retailers across Wisconsin, including Fleet Farm and Dick’s Sporting Goods. The company also operates three factory stores throughout the state.
When could prices rise?
Some products could see immediate price hikes, while others may be more gradual, according to Paste BN.
The price of gas, for example, could shoot up right away, as tariffs on Canada raise the price of Canadian oil. And with many American vehicle parts imported from Mexico, cars could also quickly become more expensive.
On the other hand, tariffs on some goods may take longer to implement, meaning the price changes wouldn’t kick in for a while. According to a Wells Fargo analysis, steel and aluminum taxes require an approval process from the U.S. Department of Commerce that can take up to nine months.
Should I buy anything now?
Not necessarily.
While it may be beneficial to make bigger purchases before January, such as a car, experts told Paste BN stocking up on every product that could become more expensive isn’t realistic, especially perishable items like groceries.
Paste BN reporters Daniel de Visé and Jonathan Limehouse contributed to this report.