The Trump administration’s plan to slap steep tariffs on goods from dozens of countries is expected to spike prices for consumers. Some items, like leather goods, will see a bigger jump than others.

The overall impact on households will vary based on their purchasing habits. But most families — especially lower earners — are likely to feel the pain to some degree, economists said.

According to an analysis by the Budget Lab at Yale University, the average household will lose $3,800 of purchasing power per year as a result of all President Donald Trump‘s tariff policies — and retaliatory trade actions by other nations — announced as of Wednesday.

That’s a “meaningful amount,” said Ernie Tedeschi, the lab’s director of economics and former chief economist at the White House Council of Economic Advisers during the Biden administration.

The analysis doesn’t include the 34% retaliatory tariff China announced Friday on all U.S. exports, set to take effect April 10. The U.S. exported nearly $144 billion worth of goods to China in 2024, the third-largest market for U.S. goods behind Canada and Mexico, according to the Census Bureau.

Under the “reciprocal tariffs” Trump announced Wednesday, Chinese imports will face a 34% duty. Goods from Vietnam, Sri Lanka and Bangladesh face tariffs of 46%, 44% and 37%, respectively.

Taking into account the pre-existing tariffs on China totaling 20%, Beijing now faces an effective tariff rate of at least 54%.

“The tariffs are disastrous for the apparel industry worldwide, but especially for smaller countries with highly specialized garment manufacturing,” Green said.

A lot of clothing production has moved overseas over the last 50 years, Tedeschi said, but it’s “very unlikely” clothing and textile manufacturing will return to the U.S. from Asia in the wake of the new tariffs.

“People will still import clothing to a large extent, and they’ll have to eat the price increase,” he said.

The duties announced Wednesday are on top of other tariffs Trump has imposed since his second inauguration, including duties on automobiles and car parts; copper, steel and aluminum; and certain imports from Canada and Mexico.

The cost of motor vehicles and car parts could swell by over 8% according to the Yale Budget Lab analysis.

Bank of America estimated that new vehicle prices could increase as much as $10,000 if automakers pass the full impact of tariffs on to consumers.

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“Rising car prices are already a major pain point for the vast majority of Americans who live in an area where they need a car to get to work, school, their kids’ activities, and medical appointments,” said Erin Witte, director of consumer protection for the Consumer Federation of America.

“These tariffs will make it much worse, and will significantly reduce Americans’ choices about what car they want to buy,” she said.

Tariffs on specific commodities like aluminum and steel affect consumers indirectly, since the materials are used to manufacture a swath of consumer goods.

White House spokesman Kush Desai pushed back on analyses that prices will spike because of Trump’s tariff policy.

“Chicken Little ‘expert’ predictions didn’t quite pan out during President Trump’s first term, and they’re not going to pan out during his second term when President Trump again restores American Greatness from Main Street to Wall Street,” Desai said in an e-mailed statement.

Trump’s second-term tariffs are orders of magnitude larger than his first term, however.

The first Trump administration put tariffs on about $380 billion worth of goods in 2018 and 2019, according to the Tax Foundation. The tariffs so far imposed in Trump’s second term affect more than $2.5 trillion of U.S. imports, it said.

There’s also evidence that the first-term tariffs raised prices for some consumers.

Retail prices for the typical washing machine and clothing dryer rose by about 12% each — about $86 and $92 per unit, respectively — due to 2018 tariffs on imports of washing machines, according to a study by economists at the Federal Reserve Board and University of Chicago. The increased cost to consumers totaled $1.5 billion a year, the study found.

As the stock market continues to fall, some investors are eager to “buy the dip,” or purchase assets at temporarily lower prices. Financial advisors, however, urge clients to stick with long-term investing plans amid the latest volatility.

U.S. stocks plunged on Thursday after President Donald Trump issued sweeping tariffs on more than 180 countries and territories. The sell-off continued Friday after China unveiled plans to impose a 34% retaliatory tariff on all goods imported from the U.S.

As of Friday afternoon, the Dow Jones Industrial Average was down more than 1,700 points following a 1,679.39 drop on Thursday. Meanwhile, the S&P 500 was off 4.8% after losing 4.84% the previous day. The tech-heavy Nasdaq Composite slid by 4.9% after plummeting 5.97% on Thursday.

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If you’re looking for buying opportunities while assets are down, here are some things to consider, according to financial advisors.

Waiting on the sidelines can be costly because the best returns can follow the biggest dips, according to research from Bank of America.

Rather than trying to time the bottom, you should consider “dollar-cost averaging,” which systematically invests your money at set intervals, Spector said. The strategy can capture lower prices while reducing risk, he said.

While most people agree that a college education is worthwhile, fewer say it’s worth the high cost.

However, as college costs continue to rise, many top schools are responding by offering more generous financial aid packages to ensure affordability for qualified students, with some even covering the entire cost for low-income families. 

College tuition has surged by 5.6% a year, on average, since 1983, significantly outpacing other household expenses, a recent study by J.P. Morgan Asset Management found.

For the 2024-25 school year, tuition and fees plus room and board for a four-year private college averaged $58,600, up from $56,390 a year earlier. At four-year, in-state public colleges, it was $24,920, up from $24,080, according to the College Board.

Despite the rising costs, financial aid has not kept pace: Families now shoulder 48% of college expenses with their income and investments, up from 38% a decade ago, J.P. Morgan Asset Management also found.

The new, simplified Free Application for Federal Student Aid form, which first launched in 2023, was meant to improve access by expanding Pell Grant eligibility to provide more financial support to low- and middle-income families.

But even Pell Grants have not kept up with the rising cost of a four-year degree. Currently, the maximum Pell Grant award is $7,395, after notching a $500 increase in the 2023-34 academic year.

“Aid continues to not be enough and that’s the reality,” said Tricia Scarlata, head of education savings at J.P. Morgan Asset Management.

Taking on too much debt was also the No. 1 worry among college-bound students, according to a recent survey by The Princeton Review.

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This also comes amid President Donald Trump’s plans to dismantle the U.S. Department of Education and transfer the country’s $1.6 trillion student loan portfolio to the Small Business Administration.

“While the federal student loan program is in a state of flux, a lot of students are getting money directly from colleges,” said Eric Greenberg, president of Greenberg Educational Group, a New York-based consulting firm.

To bridge the affordability gap, some of the nation’s top institutions are boosting their financial aid awards to attract top students wary of sky-high college tab.

“There’s a trend of colleges with money using it as opposed to sitting on it,” Greenberg said.

Harvard University was the latest school to announce that it will be tuition free for undergraduates with family incomes of up to $200,000 beginning in the 2025-26 academic year. 

Nearly two dozen more schools have also introduced “no-loan” policies, which means student loans are eliminated altogether from their financial aid packages.

Coming out of the pandemic, highly selective colleges and universities experienced a record-breaking increase in applications, according to a report by the Common Application.

Now the acceptance rates at Ivy League schools are near rock bottom. Harvard’s acceptance rate is just under 4%, down from more than 10% two decades ago; at Princeton and Yale, it’s about 5%, down from 12% and 10%, respectively.

“The arms race for financial aid is setting up an extreme crescendo for college admissions,” said Jamie Beaton, co-founder and CEO of Crimson Education, a college consulting firm. 

More generous aid packages and tuition-free policies remove the most significant financial barrier to higher education and attract even more applicants, he said — at schools that were already among the most difficult to get into.

“There’s a massive incentive to try to gain admission to top schools,” Beaton said. “The acceptance rate has halved. And it likely will again.”

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