WASHINGTON – Ms Jolene Beam, a 27-year-old preschool teacher, is getting married in June. But she has already begun shopping for the new home she will be setting up after the wedding, expediting the purchases after hearing about the Trump tariffs.

“Do the maths, that’s going to show up in your bill,” she said. 

“I’ve bought a TV, two mattresses, pillows, cookware and lamps,” she added, as she stood in the checkout line at Macy’s. “I’m keeping them in my parents’ basement until our apartment is ready.”

Like many department stores and retailers, Macy’s was offering generous discounts for Presidents’ Day, a holiday which honours the nation’s first president and informally celebrates all presidents.

“I already bought a car last year, or I’d have rushed out to buy that too,” Ms Beam said. She was also considering placing an order for a couch and a dining table set, if the retailer could make a delayed delivery. “I’m hunting around,” she said.

All products from China have been hit by an additional 10 per cent tariff since Feb 4. Economists say it is a matter of time before the retailers pass on what they pay by way of tariffs to customers. 

But for now, at Costco, the jostling weekend crowds were not perturbed as prices had not been marked up. The popular membership-only retailer, one of the world’s largest, offers high-quality products at low prices through bulk purchasing and efficient operations.  A number of items on sale including clothes, shoes, electronics, furniture and household goods are sourced from China.

Costco says it cannot guarantee that prices will not be raised, but is trying to manage costs by advancing inventory purchases to avoid supply chain disruptions and negotiating with vendors to manage expenses.

However, the 10 per cent tariff on Chinese goods is just one part of the equation. Also on the cards is the lifting of the century-old de minimis exemption, which has allowed Americans to avail of duty-free import of goods valued under US$800 (S$1,071). The cancellation of exemption has been suspended until details of its implementation are sorted out. 

Chinese e-commerce platforms like Shein, Temu and Alibaba’s AliExpress, which serve millions of budget-conscious American consumers, are already braced for a hit – as are American consumers thousands of kilometres away. 

In fact, US President Donald Trump acknowledged in a Feb 2 social media post that the tariffs could cause “some pain” for Americans. But he said his broader vision for the country “will all be worth the price that must be paid”.

Ms Ronna Kurecki, a 68-year-old retired accountant, said she has been buying clothes, gardening tools and toys for her grandchildren on Shein for more than two years. “They have the best deals on all kinds of stuff,” she said.

She had not noticed any change in the prices of merchandise on the site, but some US media reports indicate that both Shein and Temu have raised prices of several items.

A longtime Democrat from Virginia, Ms Kurecki admitted she had voted for Mr Trump in the November 2024 election, mainly for his promise of bringing down prices on Day 1. 

Did she regret her vote, now that the Trump tariffs can raise her bills? 

“No, I have faith he will do right by us,” she said. “Give him time, he’s a businessman, he’s on to something.”

“China will soon see it can’t go on stiffing Americans. And if it does not, we can make our own shears and watering cans,” she added.

American-made products would be more expensive than the cheap imports from China, she conceded readily, but shrugged when asked if she was prepared to pay more. 

“You gotta do what you gotta do, maybe that’s the push I needed to stop buying stuff I don’t need,” she said. “We’re Americans, we’ll figure it out.”

That would seem a brave attitude to take, considering the sheer number of Chinese goods that are part of American homes. Clothes, shoes, toys, gaming consoles, phones, tablets, laptops and many other items from China are likely to become more expensive due to the tariffs. 

On the annual US$450 billion worth of Chinese imports, the additional 10 per cent tariff imposes an additional cost of at least US$45 billion on the importers. 

Aside from those levies, Mr Trump has also proposed a 25 per cent tariff on all steel and aluminium imports that will kick in from March 12. These tariffs will apply to a total of about US$50 billion in imports. The US imports about a quarter of its steel needs, with most of it sourced from Canada and Mexico, along with Brazil, South Korea and Japan. 

Mr Trump says the tariffs will help US producers who are being priced out of the market by the dumping of subsidised Chinese steel. They could also incentivise foreign companies to open new plants in the US to avoid paying tariffs. In addition, buyers could switch to made-in-America products rather than fork out more for imports.

Over half of aluminium from Canada, not China

The catch is that more than half of aluminium used in the US comes from Canada, which has an abundance of cheap hydropower needed to make the alloy. When tariffs are added in, American makers of electronics, military equipment and aircraft are bound to suffer. Aluminium makes up most of a plane’s weight. 

Even an everyday item – like a soft drink can – contains aluminium and will be impacted.

Making a car requires about half a ton of steel, so a 25 per cent tariff could add over US$1,000 to the production costs per vehicle, according to experts.

Car prices could rise even more sharply if the 25 per cent tariffs are imposed on all Mexican and Canadian imports, now subject to a 30-day pause as officials negotiate. 

Those tariffs would add US$6,250 to the average US$25,000 price of a car shipped to the US from those two countries, according to S&P Global Mobility.

In 2018, when Mr Trump first imposed tariffs on iron and steel, Caterpillar, the American company which is the world’s largest manufacturer of construction equipment, raised prices to make up for more than US$100 million in extra costs.

According to the Peterson Institute of International Economics, the imposition of 25 per cent tariffs on most goods from Canada and Mexico (except Canadian energy that faces 10 per cent tariff), alongside a 10 per cent increase in tariffs on goods from China, would result in a tax increase of more than US$1,200 a year to a typical US household.

And that is not including an even bigger sword that dangles from April: reciprocal tariffs.

Mr Trump has ordered his Cabinet officials to study how the US should impose import duties on products in cases where another country levies higher duties on US goods.

“If they charge us, we charge them… every country,” Mr Trump said on Feb 16. “If they are charging us 130 per cent, and we’re charging them nothing, it’s not going to stay that way.”

Deutsche Bank economists, in a Feb 10 research report, said that the steel and aluminium tariffs, plus the reciprocal tariffs, could boost the core personal consumption expenditures price index – a key measure of inflation – by an additional 0.4 percentage points,

If the now-paused proposed tariffs on Mexico and Canada are also added in, inflation could rise higher than 3.5 per cent, they noted. 

Even if American companies absorb the tariffs, something will have to give. It could mean the companies would have to cut wages or payrolls – or the returns to shareholders.

In the longer run, Mr Trump’s bet could pay off only if there is a revival in American manufacturing. 

• Bhagyashree Garekar is The Straits Times’ US bureau chief. Her previous key roles were as the newspaper’s foreign editor (2020-2023) and as its US correspondent during the Bush and Obama administrations.

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