President Trump’s tariffs have sparked concerns about their potential impact on personal finances. To gain insights, I consulted financial experts Courtney Alev from Credit Karma, Donna Deaton from RE/MAX Victory + Affiliates, Laura Mattia, a senior financial advisor, and Ayako Yoshioka from Wealth Enhancement Group. Tariffs are taxes applied to imported goods to stimulate domestic economies and protect local industries.
However, they often create an economic domino effect for consumers. Businesses may pass the cost of tariffs onto customers, leading to higher prices for everyday imported goods like electronics, cars, alcohol, clothing, shoes, and furniture. The housing market might face additional challenges.
Deaton predicts that tariffs will exacerbate supply and demand issues, with fewer homeowners willing to sell. If tariffs increase construction costs, fewer housing options will be built, increasing rent prices. Rental property owners might also struggle to keep rent low.
Experts analyze Trump’s tariffs’ impacts
Higher costs of goods can lead to higher inflation and interest rates. While this might make it easier to grow savings, banks are slow to raise interest rates on savings accounts while rushing to hike rates on mortgages and credit cards.
Your savings may not grow significantly despite inflation. If you have a retirement or stock portfolio, it has likely taken a hit following the announcement of new tariffs. Mattia explains that this crash is likely temporary, but the market may not bounce back immediately.
Those close to retirement will feel the most significant effects. Alev recommends focusing on what you can control, like prioritizing essential purchases and reallocating discretionary funds to cover rising costs. She also emphasizes supporting local stores and American businesses to mitigate some negative impacts of tariffs.
Navigating these financial uncertainties involves staying informed and adaptable. By taking proactive steps, you can maintain better control over your personal finances during these unpredictable economic times.
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