President Trump’s tariffs on imported steel and aluminum are set to take effect March 23. That leaves some now wondering if they should use Spring Break to shop for a new vehicle or major appliance before prices rise.
Octavio Blanco with Consumer Reports has followed this story from the beginning and said more information is still needed about which countries will take a hit from the tariffs before the full affect can be predicted.
“On the low end, if tariffs are excluding Mexico and Canada we could see a cost impact of about 2.5 percent to 5 percent increases,” Blanco said. “If those countries are included in the tariff, if the NAFTA talks unravel, then you could see higher impact between 5 percent and 10 percent on big ticket items like cars and washing machines.”
Price increases would not likely reach consumers until 2019 or 2020.
“Some companies might have products that are in storage ready to be sold that have already been paid for and will not be impacted by the tariffs,” Blanco said. “Other big automakers may have contracts for steel that extend through 2018, insulating them from the tariffs.”
That leads to the question of when you should buy the items you are looking to purchase.
“If you are in the market for a big ticket item like a car for example, it might be worth your wild to get out there and buy it sooner rather than later,” Blanco said. “If you think about a $30,000 car and you think that the increase might by 5 percent, that’s a $1,500 increase, which is not nothing.”
Consumers rushing to make purchases could also cause prices to rise faster.
“One of the drawbacks, if everybody starts to run out and buy a car or a washing machine or whatever, is that it is going to artificially inflate the price of those products even before the tariffs are instituted,” Blanco said. “That’s another reason why if you are in the market to buy a car next year, you might want to do it this year.”