If you’re inclined to roll your eyes at the stuffy academics shouting about the damage tariffs do to the economy, I get it. “Tariff” is just one of those words that makes your eyelids feel as heavy as they did in your 9 a.m. undergraduate econ class.
But if you don’t want to heed the many, many economists’ warnings about former President Trump’s fringe economic plans, take it from the people running the companies that make the stuff you buy: Prices will go up. How much and how fast is hard to know, but you can bet your bottom dollar you’ll be needing more dollars to pay for everyday goods if Trump’s sweeping tariffs are put in place.
“If we get tariffs, we will pass those tariff costs back to the consumer,” said Philip Daniele, CEO of AutoZone, on an earnings call in September.
AutoZone also won’t need to wait until the policies are enacted, Daniele noted. Once they know what the markup will be, “we generally raise prices ahead of that.”
A quick primer on tariffs: They’re a tax on imported goods — clothes, shoes, toys, car parts, appliances, you name it. But the extra money does not come from the foreign companies that produce those goods. The American company doing the importing pays the money to the US Treasury. And more often than not, that means you, the consumer, pay for the tariff.
This isn’t speculation or theory, it’s just the way tariffs work — and we have the last six years of global trade to prove it.
