NRF Warns Trump Tariffs Could Slash Consumer Spending Power by Billions

A newly released study by the National Retail Federation (NRF) paints a stark picture for American consumers: if President-elect Donald Trump’s proposed tariffs on imported goods take effect, consumers could see billions in lost spending power annually.

The study, titled “Estimated Impacts of Proposed Tariffs on Imports: Apparel, Toys, Furniture, Household Appliances, Footwear and Travel Goods,” outlines potential costs for American families as tariffs could hike up prices on essentials ranging from shoes to mattresses.

How Tariffs Translate to Price Hikes

According to the NRF’s findings, proposed tariffs include a universal 10-20% increase on all imports, with a staggering 60-100% tariff on imports specifically from China. These tariffs, originally championed by former President Donald Trump, aim to shift production back to U.S. manufacturers but could result in higher prices for everyday goods—costs that would ultimately be borne by the consumer.

“A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers’ pockets through higher prices,” said Jonathan Gold, NRF’s Vice President of Supply Chain and Customs Policy. Simply put, retailers relying on foreign imports would be forced to raise prices, with items like a $40 toaster oven jumping to around $48-$52 and a $50 pair of athletic shoes costing consumers $59-$64, according to the NRF.

Impact on U.S. Families and Spending Power

For American families, the proposed tariffs would have far-reaching implications, particularly for low-income households already stretched by inflation. NRF’s study estimates the following impacts on consumer spending power:

• Apparel: An additional $13.9 to $24 billion in consumer spending.
• Toys: Costs rising by $8.8 to $14.2 billion.
• Furniture: American families could pay $8.5 to $13.1 billion more.
• Household Appliances: Price tags increasing by $6.4 to $10.9 billion.
• Footwear: Another $6.4 to $10.7 billion from consumers’ pockets.
• Travel Goods: Spending on items like suitcases and backpacks could see a $2.2 to $3.9 billion increase.

In the most extreme scenarios, average tariff rates for these categories would exceed 50%, representing a dramatic rise from current levels.

What It Means for Retailers and the Market

NRF’s study underscores that the increased costs are simply too high for retailers to absorb without impacting pricing. This is particularly true for industries like apparel and electronics, where China remains the dominant supplier. As Gold pointed out, the price hikes would be “higher than many consumers would be willing or able to pay,” with inflationary pressures adding to the squeeze on U.S. wallets.

While some U.S. manufacturers might benefit from the boost to domestic production, NRF’s findings suggest these gains wouldn’t offset the economic burden on American consumers or the impact on overall spending power.

Bottom Line: Consumers Brace for Higher Prices and Lower Spending Power

If enacted, the tariffs could result in $46 to $78 billion in lost spending power each year, marking a significant dent in American consumers’ purchasing capacity. With critical economic and retail shifts on the horizon, consumers may soon be forced to weigh the costs of keeping up with everyday essentials.

In an already challenging economic environment, the NRF’s warning is clear: a tariff-driven increase in prices on imported goods could shift consumer spending habits, squeezing budgets and impacting household affordability nationwide.

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