PUBLISHED MAY 5, 2019

How Tariffs Can Affect Your Wallet

In case you missed it, the US has been fighting with other countries about trade policies for a while. The bargaining chip of choice: tariffs. That’s a special tax on foreign imports that makes them cost more. Think of it as a monetary punishment for countries that aren’t getting along. (The idea is that if a country’s exports cost more, consumers won’t buy as much. Then that country loses money.)

Who's been topping President Trump's sh*t list lately: China. The two countries have been on the rocks since March 2018. Trump's slapped tariffs on billions of dollars of Chinese imports. China's pres has retaliated. It hasn't been pretty.

Here’s what that means for your wallet.

You may spend more on big-ticket and everyday items. Many companies eventually pass on their higher cost of goods to customers. Meaning you’re paying more, too. Things that are already more expensive because of existing tariffs: washers and dryers, home renos, and soda. The latest rounds of tariffs that went into effect on September 1 take aim at products like clothing, shoes, toys, and electronics.

The stock market could get bumpy. Trade drama doesn’t usually sit well with investors. The Dow Jones (an index of 30 big US companies many people use to benchmark overall market performance) has already had some pretty rough days in response to trade news. On the bright side, the market’s recovered from every major drop in history. Then continued to go up. If you’re investing for the long term, stay cool and try to block out what happens in the short term.

theSkimm: One estimate from J.P. Morgan found that tariffs could cost the avg American household about $1,000 a year. Maybe even more as new rounds of tariffs take effect. There’s not much you can do to control that...aside from comparison-shopping and adjusting your monthly budget to make up the difference. Not fun. But smart.

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