Trump’s New Tariffs Could Raise Prices for New York Consumers

New tariffs introduced by President Donald Trump on Feb. 24 could soon affect the price New Yorkers pay for everyday goods, economists say, as businesses face higher costs for imported products and materials. 

These tariffs went into effect at 10%, as opposed to the 15% Trump first proposed. His attempt to invoke the International Emergency Economic Powers Act of 1977 was deemed invalid in a 6-3 vote of the U.S. Supreme Court, as they ruled that the statute presented does not grant the president authority to impose tariffs. 

Although this has come as a major setback for the Trump administration and its promised economic policy, Trump said he will seek to restore the tariffs using other legal powers.

Early last year, Trump successfully invoked the same International Emergency Economic Powers Act of 1977 to impose tariffs on imports from more than 100 countries. The administration said the tariffs were meant to reduce the trade deficit and strengthen U.S. manufacturing, though they have also been used to generate revenue and apply pressure in international trade talks. 

This has created a chain reaction, with countless states and small businesses suing over the tariffs, arguing that tariffs fall under Congress’s authority. On the matter, Mitch McConnell said: “The use of IEEPA to circumvent Congress in the imposition of tariffs — already without precedent — is also illegal.” While the Republican senator of Kentucky has had a rocky history with the current president, his view on the proposed tariffs is clear.

Tariffs are taxes placed on imported goods, and economists say the costs are rarely absorbed entirely by suppliers. Instead, the additional expense is often passed along through higher prices for consumers.

Lauren Imperiale, an economics professor at Marist University, said that while tariffs are technically paid by the companies importing goods, the financial burden usually reaches shoppers.

“Tariffs can be paid by the supplier, but usually this tax is passed on to the consumer, resulting in higher prices,” Imperiale said.

Additionally, Imperiale warned against the possibility of price increases with domestic producers.

“Domestic producers of the same good could also raise their prices because they now see the price of their competitors has increased,” she said.

The effects of tariffs can appear quickly in industries that rely on fast-moving goods, such as produce or clothing, though in some cases, companies attempt to delay price increases.

“Other times producers may decrease the package size of a product instead of raising the price so the price stays the same,” Imperiale said.

Over time, however, economists say prices often settle at a higher level once tariffs are introduced.

New York’s economy, in particular, could feel the effects more strongly than some other parts of the country, namely because of its reliance on imported goods. This is seen most often in the luxury goods and healthcare equipment sectors, where the impacts may be most profound. But at a localized scale, small businesses may face particular challenges adapting to higher import costs.

“They would feel the tariff effects stronger than big businesses like Amazon, Walmart or Target,” Imperiale said. “Smaller businesses have fewer resources and would most likely have to pass those costs on to consumers.”

In the end, Imperiale said that tariffs often translate into higher prices for consumers as businesses pass along rising import costs. For many New Yorkers, the policy’s impact may become most visible not in political debates, but at the checkout line.