Trump’s prices threaten to end the quarter -century era cheap products for American consumers

Washington (AP) – The new prices of President Donald Trump threaten to put up prices On clothing, mobile phones, furniture and many other products in the coming months, ending the cheap product era that Americans appreciated for about a quarter of a century before the pandemic.

In return, the managers of the White House hope that import taxes will create more paid manufacturing jobs by bringing production to the United States. It is a politically risky compromise that could take years to materialize, and it should overcome high barriers, such as the automation of most modern factories.

Even after Trump U-Tour on Wednesdays This has paused for new prices on around 60 nations for 90 days, the American average tasks remain much higher than a few months ago.

Trump imposed a 10% rate on all imports, while goods from China – the third source of imports from the United States – are faced with huge rights of 145%. And there are 25% of import taxes Steel, aluminum,, cars And about half of the goods in Canada and Mexico.

Consequently, the average American rate has gone from less than 3% before the inauguration of Trump to around 20% now, economists calculate, the highest level since at least the 1940s.

Cars, iPhones could become more expensive

If they remain in place, such high tasks would reverse decades of globalization that helped reduce costs For American buyers.

Other trends, including the automation of the factory and technological innovation, in particular in electronics such as televisions, also lowered prices. But imports help keep prices under control, according to economists, partly due to the drop in labor costs abroad and because increased competition on the American market forces American companies to be more effective.

“Free trade has contributed to moderating long -term inflation,” said Scott Lincicome, commercial analyst at Libertarian Cato Institute. “If we enter a more limited supply side … then you will probably see more expensive things,” said Lincicome.

Bank of America estimates that new rights could increase prices of cars on average by $ 4,500, even assuming that car manufacturers absorb some of the impact of prices. Such an increase would follow net price increases in recent years that have left the average price of a new car at $ 48,000 painful.

Aaron Rubin, CEO of SHIPHERO LLC, which provides software to merchants to help reserve shipments and follow the order deliveries, said its data indicate that retailers are already starting to increase prices to get ahead of the prices.

SHIPHERO data capture prices of several million products equivalent to around 1% of overall American electronic commerce sales. Prices increased by 3.9% on Sunday and Monday on a variety of goods compared to the week before Trump announced more prices, said Rubin.

If the prices hold, Apple should increase the prices of iPhones and other popular products because the company’s supply chain is so highly concentrated in China.

The iPhone 16 Pro Max could see one of the largest sticker shocks, its price potentially increased by 29%. This could spend the start -up price from $ 1,200 to $ 1,550, according to an estimate of the UBS chief investment office.

A long low price sequence

After two -figure inflation of the 1970s was defeated in the early 1980s, inflation was still regularly exceeded 4% per year in the mid -1990s, when more free trade and globalization began to intensify. From 1995 to 2020, it was on average less than 2.2%.

American buyers have collected the advantages. The average costs of clothing fell 8% from 1995 to 2020, at the same time as overall prices increased by 74%, according to government data. The costs of the furniture was roughly unchanged. The average price of shoes has only increased by 10%.

Trump administration officials have sometimes recognized the higher prices of prices.

In a speech last month at the New York Economic Club, the secretary of the Treasury, Scott Bessent, said: “Access to cheap products is not the essence of the American dream.”

The will of the administration to minimize the attraction of cheap goods is a risky decision, coming after the worst increase in inflation in four decades from 2021 to 2023. The leap of the prices of essential elements such as grocery store, gas and housing embittered many voters on the economy under Former President Joe BidenDespite low unemployment.

According to the voting, a national survey of voters last November, About half of Trump voters says it High price of gas, grocery store and other goods was the most important factor in their vote. 43% of Trump voters said it was an important factor, even if it was not the most important consideration.

Some consumers say they are ready to pay more for American goods.

Alisha Sholtis, 38, influencer of the nursing media who has become a nurse, used to shop greatly on the fast -fashionable email commerce site based on TEMU China, to collect highs and polyester dresses for $ 5 to $ 25 and to enter electronic devices and cheap toys. TEMU products will now face huge new prices.

However, Sholtis, who lives in Davison, Michigan, said that she was tired of the clothes that collapsed after washing and the toys that were easily broken. She is now shopping elsewhere.

She applauds Trump’s goal of bringing a little manufacturing to the United States, because she believes that the movement will lead to better quality. And she said she would not be disturbing to pay higher prices accordingly.

“I would buy less better things,” she said.

Will the work come back?

Kevin Hassett, Trump’s best economic advisor, admitted on Sunday that “there could be a certain price increase” of the president’s prices.

But he noted that there had been compromises of globalization: “We obtained cheap products at the grocery store, but we then had fewer jobs,” he said on “this week” of ABC.

The secretary of commerce, Howard Lungick, predicted that the prices would force a quarter of manufacture.

“The army of millions and millions of human beings screwing small screws to make iPhones, this kind of thing will come to America,” said Lunick on April 6 Appearance on cbs.

Analysts doubt that Apple could build phones in the United States

“The concept of manufacturing iphones in the United States is a non-starter,” said Dan Ives, Wedbush Securities analyst, reflecting an opinion largely in the investment community that follows each Apple movement. He estimated that the current price of $ 1,000 for an iPhone made in China or India would increase to more than $ 3,000 if production was moving to the United States

Shannon Williams, CEO of Home Fernishings Association, a furniture trade group, said that he can take years to create a factory in the United States, it is not clear if there would be enough workers, given the low American unemployment rate of 4.2%.

The most innovative furniture manufacturers in the United States use technology to reduce their labor needs. “They cross it and completely automate their assembly chain,” she said.

China exported 1.2 billion pairs of shoes to the United States last year, according to shoe distributors and America retailers. About 26% of American clothes were imported from China in 2023, A study foundAnd around 80% of American toys.

Williams has said that furniture prices will probably not increase much so early, because most companies are now importing other Asian nations, such as Vietnam or Malaysia.

However, “globalization has certainly contributed to reducing costs,” she said. “There is a reason why you could buy a sofa of $ 699 in 1985 and buy a sofa of $ 699 today.”

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D’Inocenzio has brought in New York. The editors of the Associated Press Michael Liedtke in San Francisco and Linley Sanders in Washington also contributed to this report.