The tariffs will almost certainly result in higher food prices, according to an analysis by the nonpartisan Tax Foundation. The U.S. simply doesn’t make enough of some products, like bananas or coffee, to satisfy demand. Fish, beer and liquor are also likely to get more expensive, the foundation said.
Ben Aneff, managing partner at Tribeca Wine Merchants and president of the U.S. Wine Trade Alliance, said shoppers would see prices rise 20% to 25% at his store and others starting Friday because of tariffs and the declining value of the dollar.
“Nobody can afford to eat the tariff. It gets passed on,” Aneff said.
Aneff said shoppers haven’t felt the impact from higher duties until now because distributors and retailers accelerated shipments from France and other European Union countries earlier in the year. But with the EU’s tariff rate set to go up to 15% in a week, Aneff expects European wine prices to jump 30% in September.
Clothing and shoe prices are already creeping up
Ninety-seven percent of clothing and shoes sold in the U.S. are imported, primarily from Asia, according to the American Apparel & Footwear Association said. China leads the pack, but companies have been shifting more of their sourcing to Vietnam, Indonesia and India.
It will be interesting to see if American consumers change their spending habits. During the pandemic, Americans saved their money. Now they are back to spending faster than they are making it, adding very high priced debt.
Will they start saving soon? Buy chicken instead of beef? Buy sugar cane Coca-Cola instead of high priced Brazilian coffee?
And with decreased consumption, will prices start to fall? Less demand?
And interest rates for savers are high. Personally I am loving how much my CD's are paying right now.
Thomas Sowell: There are no solutions, just trade-offs.
