Bracing for Trump's latest tariff plan

Oakland, California - President Trump has called Wednesday "Liberation Day". He's promising to roll out a massive tariff plan that he says will free the U.S. from reliance on foreign goods. But so far the president has been light on details. 

Some experts are worried about the potential economic consequences. They are saying the tariffs are likely to include reciprocal or retaliatory tariffs to match those of other countries even if they raise them on U.S. exports. 

The laundry list of goods to be affected by tariffs is long and growing. Take new home construction, for example.   

Economic impacts

Approximately 7% of all goods used in new residential construction originate from a foreign nation. Canada, a major wood supplier, will be hit with 25% tariffs on top of the 14.5% already in effect, making the total hit almost 40%.

That alone would raise the price of an average new home $9,200. But, yet another 14.5% tariff increase is expected in the fall.

Longtime University of New Haven Economist Brian Marks has held numerous corporate executive positions and was appointed by President Reagan to the U.S. Commodity Futures Trading Commission. Marks says tariffs are a regressive tax. 

"Those who are in the middle class or lower class, in the economic wealth paradigm, are going to bear more of the burden of the tax as a percent of their income," Professor Marks.

Most impacted products

Yale University's non-partisan Budget Lab says that products to be most affected initially are electronics, clothing, vehicles and food. 

Wedbush Securities estimates that foreign-made car prices increase from $5,000 to $10,000 each.

Even cars partially manufactured abroad would also be tariffed. 

"The reality is, U.S. car prices, if they were fully manufactured here in the U.S. will also increase," said Marks.

As a direct result, auto insurance prices will go up to cover more expensive cars, used car prices will rise for those who can't afford new ones, and overall repair costs will rise since half of all car parts come from overseas. 

Cost passed on to consumers 

Professor Marks said whatever the tariffs are, as much as 60% of the tariff will be passed on to consumers. "So, I think it's buckle up your seat belt," he said.

The U.S. Department of Agriculture said half of U.S.'s fruit and more than two-thirds of its vegetables came from Mexico in 2022. 

Prices already going up

Prices are already going up.

"I do think it's a good time for the president to tell the American people what the tariffs will mean to them; how this is in their interest long term," said Liz Peek, conservative business analyst for Fox Business News.

What's next:

Because tariffs reignite inflation, slow business growth and cost jobs, Goldman Sachs has raised the odds of a recession to 35% in the next 12 months.