Trump's tariffs are now in place. Alcohol, a cup of joe, and Toyotas are about to cost a whole lot more

Yahoo

2 days ago

President Donald Trump's global tariffs, ranging from 10 to 50 percent, took effect on Thursday, igniting fear among consumers, companies, and investors about potential price hikes.
Everyday items ranging from coffee to Toyotas, home furnishings to Gap jeans, are expected to become more expensive as companies adjust their prices to counteract the impact of tariffs. While the president has asked companies to absorb any increases in costs, many cannot forever.
Even luxury items such as Range Rovers, French wines, or Rolex watches are likely to face prices hikes as they navigate 10 percent, 15 percent, and 39 percent tariffs, respectively, from the president.
While Trump wants tariffs to promote domestic production and purchasing, Americans will most likely bear the cost. Economic experts agree that sweeping tariffs on goods from countries could lead to supply chain issues, price spikes, or even inflation.
Here are some of the goods expected to cost more.
Alcohol
Consumers of French, Italian, or Spanish wines, Scotch whiskey, and aperitifs such as Aperol, can expect to see the price of their favorite alcoholic beverage rise due to the 15 percent tariff on the European Union.
The E.U. is a major exporter of wines and spirits to the U.S. In 2024 alone, the E.U. accounted for $3.4 billion worth of imported spirits.
Despite pleas from the beverage industry, the president's trade deal did not create exemptions for alcohol, which will likely drive up the price of imported wine or liquor – either in stores or restaurants.
'Without productive negotiations reducing reciprocal tariffs on wine and spirits, American wine retailers anticipate a significant decline in sales on top of the already difficult market, as well as significant job losses and subsequent business closures,' Tom Wark, the executive director of the Association of Wine Retailers, said.
A letter to the president from the Toast Not Tariffs Coalition, a group of 57 associations representing the U.S. alcohol industry and related industries, said tariffs on the E.U. could result in 25,000 American job losses, and nearly $2 billion in lost sales.
Diageo, the maker of Guinness, Bailey's, Johnnie Walker, and more, said the company expects to see a $200 million slump as a result of the tariffs.
Cars and car parts
Already, consumers have seen cars and car parts become more expensive over the last few months as a result of Trump's tariffs because the U.S. relies heavily on its trading partners for auto parts.
Cox Automotive, an industry service and technology provider, expects the sticker price of vehicles to rise anywhere from four-to-eight percent by the end of the year. That means the average car price would be above $50,000.
While the president struck several deals with countries, many of them still make imported vehicles more expensive.
Imported cars from the U.K., such as Range Rovers, are subject to a 10 percent tariff.
Japan, which sells more cars to the U.S. than any other country, is facing a 15 percent tariff rate, which is expected to cause major disruption.
Toyota said on August 7 it expects a $9.5 billion profit loss for the year.
"It's honestly very difficult for us to predict what will happen regarding the market environment," Takanori Azuma, Toyota's head of finance, said.
But given that many car parts are imported from Japan, the tariffs are likely to hurt U.S. carmakers as well.
General Motors projects a $4 billion loss, Stellantis, the maker of Jeeps, said it anticipates tariffs will add $1.7 billion in expenses, and Ford, which builds more cars in the U.S. than any of its rivals, said it expects tariffs to cause a $2 billion loss this year.
Clothing
Clothing is expected to see one of the most significant price increases since the U.S. is the largest single importer of apparel, and much of it comes from countries in Asia.
'The 2025 tariffs disproportionately affect clothing and textiles, with consumers facing 40% higher shoe prices and 38% higher apparel prices in the short-run,' the Budget Lab at Yale, a nonpartisan policy research center, said in a recent analysis. Shoes and apparel could remain 19 percent and 17 percent higher, respectively, in the long run, the report added.
Vietnam, one of the largest exporters of appear to the U.S., has agreed to a 20 percent tariff. Brands such as Nike, Adidas, Zara, and Gap manufacture much of their clothing in Vietnam. While many can absorb some of those costs, even raising prices 10 percent would make a $65 pair of shoes $71.50, without tax.
Bjorn Gulden, the CEO of Adidas, said the tariffs 'will directly increase the cost of our products for the U.S.'
Other countries that are high producers of clothing face significant tariffs as well. Bangladesh has a 20 percent tariff, while Indonesia and Cambodia both face a 19 percent tariff.
India, also a large producer of apparel, faces a steep tariff of 25 percent and Trump has threatened to increase that to 50 percent by the end of August if the country does not stop importing Russian oil.
While the U.S. also imports a large portion of clothing from China, which is still negotiating a trade deal, Trump's decision to get rid of the de minimis exemption will make it more costly for consumers to purchase cheap clothing from stores like Shein or Temu.
Coffee
The U.S. relies heavily on Brazil to import coffee for the 165 million people who need their daily caffeine fix, but Trump's 50 percent tariff threatens the long-term availability and price of the drink.
"When people go to their local coffee shop, whether it's Starbucks or something else, by and large they will likely be buying some form of Brazilian coffee," Monica de Bolle, senior fellow at the Peterson Institute for International Economics, told NPR.
"A 50 percent tariff will kill that market."
Household products: appliances, cookware, furniture
Everyday household items made with steel or aluminum, such as cookware, appliances, furniture, and more, are likely going to be impacted by Trump's steep 50 percent industry tariffs.
The U.S. relies heavily on its trading partners, particularly Canada and Mexico, for steel and aluminium imports.
Nearly half of the aluminum used in the U.S. is imported, while less than a quarter of steel is imported. But that doesn't mean consumers won't see price increases.
One small business, Heritage Steel, a family-owned cookware manufacturer in Tennessee, told NBC News that they recently received a tariff bill of $75,000 on an order of handles – and they're anticipating higher bills in the future.
Since the U.S. does not have many specialized steel manufacturers, Heritage Steel imports approximately 75 percent of its raw material. Unlike other cookware manufacturers, they only import raw material and create their products in the U.S.
Danny Henn, the vice president of operations for Hertiage Steel, told NBC News that the company wants to keep its products moderately priced, but at the same time, cannot absorb the new price of steel. They've raised their prices approximately 15 percent to make up for it.
'We're happy and proud to be a provider of really high-quality cookware, but one that's more affordably priced than some of the others on the market,' Henn said. 'We want to continue to offer the best price we can, given our constraints.'
Watches
Although imported watches are not an everyday essential, luxury wristwatches made in Switzerland are likely to see significant price increases thanks to the 39 percent tariff imposed on the country on Thursday.
That means Americans looking to purchase a watch from recognizable brands such as Rolex, Breitling, Patek Philippe, Omega, or TAG Heuer may have to pay significantly more.
An analysis of the impact, conducted by Bob's Watches, a secondhand watch retailer, found that a $9,900 stainless steel Breitling could rise to $11,080.