Many companies plan to pass tariff costs on to consumers, economic data shows

President Trump’s claims about tariffs and their impact on American consumers have been met with skepticism as recent data suggests that businesses are passing on the added costs to customers. According to a survey conducted by Apollo Global Management chief economist Torsten Sløk and the Federal Reserve Bank of Dallas, 76% of Texas manufacturers plan to pass tariff-related costs to consumers, while 50% will absorb the costs internally. This shift in pricing strategy could lead to higher prices for consumers in the near future.

The Center for American Progress has warned that the economic fallout from the tariffs imposed by the Trump administration will disproportionately affect low- and middle-income consumers. On average, households could face an additional cost of $5,200 per year due to the tariffs, according to the nonpartisan think tank.

Manufacturers are already bracing for price increases, with expectations that prices will rise by 3.6% over the next 12 months. This increase is attributed to concerns over trade and the impact of tariffs on businesses. David Loftus, CEO of the Electronic Component Industry Association, highlighted that manufacturers are unable to absorb the tariffs and will pass on the costs to distributors and eventually to consumers.

A Gallup poll revealed that nearly 90% of Americans expect tariffs to drive up prices in the coming year. While the Consumer Price Index in March showed a modest increase of 2.4% on an annual basis, experts believe that the tariffs, along with retaliatory measures from other countries, will lead to higher consumer prices in the future.

Goldman Sachs analysts predict that core inflation, as measured by the personal consumption expenditures index, could rise to 3.8% this year, up from 2.6% in March. Electronics and apparel are expected to see the most significant price increases due to the tariffs.

Despite President Trump’s insistence that other countries and exporters will bear the brunt of tariff costs, businesses are already taking steps to increase prices to offset the added expenses. Companies like Stanley Black & Decker and Procter & Gamble have announced price hikes, citing the uncertainty surrounding tariffs. Even Chinese online retailers like Shein and Temu have signaled plans to raise prices in response to changes in tariff policies.

As businesses continue to adjust to the impact of tariffs, consumers should be prepared for higher prices on a range of goods and services. The long-term effects of these trade policies remain uncertain, but it is clear that American consumers may face higher costs as a result of the tariffs imposed by the Trump administration.