People shop at an Abercrombie & Fitch store in Midtown Manhattan in New York City on October 24, 2024.
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Former President Donald Trump's universal tariff proposals could cause prices of clothing, toys, furniture, appliances, shoes and travel items to skyrocket, according to a new report from the National Retail Federation.
The study, released on the eve of Election Day, adds to the array of economic and industry analyzes warning of the inflationary impact of the Republican presidential candidate's tough trade approach.
Trump has said he would impose a 10% or 20% tariff on all imports across the board. He also envisioned a particularly high China rate of between 60% and 100%.
In both cases, the NRF found that the impact of Trump's tariffs would result in “dramatic” double-digit price spikes in nearly all six retail categories studied by the trade group.
For example, the cost of clothing could rise between 12.5% and 20.6%, the analysis found. That means an $80 pair of men's jeans would cost between $90 and $96 instead. A $100 coat? That would cost between $112 and $121.
According to the Bureau of Labor Statistics, these new prices would strain consumer budgets, particularly for low-income households, which spend three times as much of their monthly budget on clothing as high-income households.
The report found that toys could see the biggest price spikes: between 36.3% and 55.8%. The price of a $200 crib would also rise to $213 to $219.
At the macro level, these price increases would also undermine consumer spending. The report found that if Trump imposed both universal tariffs and particularly high China tariffs, the more expensive retail goods would result in a loss of purchasing power of $46 billion.
“Broad-based tariffs of the magnitude proposed by former President Trump will represent a massive tax increase on American families as they pay more for all imports, reducing their purchasing power and thus placing a heavy burden on their spending and the overall economy,” Chief Moody's said economist Mark Zandi told CNBC.
The report did not take into account Trump's new proposal announced Monday to impose a 25% tariff on Mexico if the country does not adopt stricter border regulations, which he announced at his rally in Raleigh, North Carolina.
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Vice President Kamala Harris has seized on economic criticism of Trump's sweeping tariff plans, calling them a “Trump sales tax” on American consumers. Instead, she favors a more targeted approach to the tasks.
However, many voters are responding positively to Trump's tariff proposals because they believe years of free trade have decimated factory towns across America.
However, according to a nonpartisan working paper, Trump's tariffs during his first term as president, including tariffs on foreign metals and washing machines, have not helped increase the total number of jobs in those industries.
“If higher taxes are imposed on these imports from China, their production will shift to other, less developed countries,” said Mary Lovely, a senior fellow at the Peterson Institute for International Economics.
Given the relatively higher wages in the U.S., Lovely said, “it is very unlikely that many jobs will be created in these industries.”
This means that Americans will not see additional jobs, but rather that prices will rise.
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