U.S. consumer prices are beginning to reflect the full impact of Donald Trump’s tariff policy, with rising costs now visible in daily goods ranging from electronics to produce.
According to the Yale Budget Research Institute, if all retaliatory tariffs proposed by Trump take effect on August 1, the effective tariff rate will reach 20.6%—the highest level since the 1910s. That would surpass even the rates imposed under the Smoot-Hawley Tariff Act during the Great Depression.
Since April, the U.S. government has implemented a baseline 10% tariff on imports from 57 economies, including South Korea, and is now adding tariffs of up to 30% depending on bilateral negotiations.
These increased tariffs are already pushing up prices in specific consumer categories. The U.S. Department of Labor reported that the Consumer Price Index (CPI) rose 2.7% in June, compared to 2.4% in May. Notably, prices for toys (1.8%), household electronics (1.9%), and furniture (1.0%)—all sensitive to import costs—saw significant increases.
Experts say companies have so far absorbed rising costs using existing inventory, but as those supplies run out, higher prices are now being passed on to consumers.
One visible example is Mexican tomatoes, which account for roughly 70% of U.S. consumer demand. On July 14, the Department of Commerce imposed a 17.09% tariff on tomatoes from Mexico. Distributors warn that retail prices could rise as much as 10% in some areas.
Still, some analysts argue that while the tariffs are causing temporary price hikes, they are unlikely to spark long-term inflation.
Sung Won Sohn, professor of finance and economics at Loyola Marymount University, explained, “Tariffs can cause a one-time shock in prices, but they are not likely to lead to persistent inflation.” He added that rising housing costs are slowing and consumer behavior is becoming more cautious, which may limit broader inflation.
Indeed, housing costs slowed from a 0.4% monthly increase in January to 0.2% in June. New and used car prices also fell by 0.3% and 0.7%, respectively, helping to offset inflation in other areas.
“Trade barriers are undoubtedly cost factors,” Sohn added, “but variables like a cooling labor market are acting as counterforces to inflation.”
The effects of the tariffs are now apparent not only in economic data but also in everyday life. From children’s toys and home appliances to fresh produce like tomatoes, U.S. consumers are starting to feel the price pressure.
Experts note that whether this is a short-term disruption or a sustained inflationary trend will depend on future shifts in consumer behavior and interest rate movements in the coming months.
BY WONHEE CHO [cho.wonhee@koreadaily.com]
