Tariff impact

Tariffs were a signature policy of Mr Trump's first term as president, and during this year's campaign Mr Trump promised to impose a 20 per cent tariff on all imports into the US and a hefty 60 per cent on imports from China. If Trump's tariff plan is implemented, it could have a significant impact on domestic consumption and the global economy.

Us consumers could lose up to $78 billion a year in spending power if Republican presidential candidate Donald Trump's proposed new import tariffs are put into effect, according to a study released by the National Retail Federation (NRF) on November 4.

The NRF study said the proposed tariffs would affect consumer categories such as clothing, toys, furniture, appliances, footwear and travel goods, particularly those with China as a major supplier.

Over the past few years, consumers have become more frugal due to high inflation and are increasingly looking to limit spending by curbing nonessential spending, which has hit sales at U.S. retailers and consumer goods companies. "Retailers rely heavily on imported products and manufactured components so that they can offer customers a wide variety of products at reasonable prices." "Said Jonathan Gold, vice president of supply chain and customs policy at the NRF.

The import tariffs, if implemented, would further exacerbate the impact on low-income households, straining their budgets and making it more difficult for them to buy everyday items, the report said.

Although the tariffs are paid by U.S. importers, they will inevitably be passed on to U.S. consumers through higher commodity prices, in part because the tariffs are too high for retailers to absorb on their own.

Companies like Levi's and Nike, for example, which source some of their products from countries like Mexico, may have no choice but to pass those costs on to consumers. Last month, the NRF forecast that U.S. holiday sales between November and December would rise 3.5 percent to $989 billion, which would be the lowest level in six years.