Trump’s tariff era could drive up prices on phones, clothes, and cars: Report

President Donald Trump’s sweeping new tariffs — including a steep 145% duty on Chinese imports — are threatening to end the decades-long era of affordable goods in the U.S., according to an AP report. The impact could be felt widely by American consumers in the coming months, with rising prices on everything from mobile phones and clothing to furniture and automobiles.

While the U.S. has temporarily paused a 26% tariff on goods from India until July,  the White House clarified that Trump’s announcement of a 90-day tariff "pause" will adjust the "tariff level...to a universal 10% tariff" while "negotiations are ongoing."

This measure, however, does not extend to China, which will face an increased tariff of 125% on its goods imported into the United States.

Concurrently, the average U.S. tariff has surged to approximately 20%, marking the highest level since the 1940s, a notable rise from below 3% prior to Trump's presidency.

The escalation of tariffs, particularly on Chinese imports, is causing significant concern in the technology sector. Apple, with a substantial portion of its supply chain based in China, is expected to raise prices on its products.

The iPhone 16 Pro Max could be notably affected, with projections of a 29% increase, elevating its starting price from $1,200 to $1,550. Despite Apple's attempts to diversify its production, nearly 80% of the 77 million iPhones shipped to the U.S. last year were manufactured in China. Dan Ives of Wedbush Securities has described Apple's position as analogous to a "boat flipped over in the ocean with no life rafts."

The automotive industry is also bracing for the impact of these tariffs. According to estimates by Bank of America, the new duties could hike car prices by an average of $4,500, exacerbating the burden on consumers already facing elevated car prices, which currently average $48,000. This potential increase is expected despite automakers possibly absorbing some of the tariffs' effects.

The broader economic ramifications of these tariffs have led to market uncertainties, with the U.S. Federal Reserve and investors expressing concerns over the potential reduction in consumer spending and business investment.

Fed officials, cited by CNN, have voiced concern that the ongoing trade tensions are dampening business investment and consumer spending. Policymakers have indicated fears that these tariffs could dampen economic growth and contribute to inflationary pressures.

The numbers underscore the shift. The average U.S. tariff rate has jumped from under 3% before Trump took office to about 20% now — the highest level since the 1940s, economists estimate. Goods from China, America’s third-largest import source, are bearing the brunt, with duties on Chinese products skyrocketing to 145%.