Whether you’re thrilled or terrified by Donald Trump’s actions so far as president, there’s no doubt the nation’s 45th commander in chief will have a significant impact on the economy. Trump’s economic message — namely that he would bring back jobs and support businesses — helped get him elected. Now, we’re going to see whether he makes good on his promises to help American workers.
But the job market isn’t the only part of the economy where Americans might feel a Trump effect. The stock market rallied after the election, and the streak has kept going into 2017, for the most part. That’s positive news for investors, though not everyone is convinced the good times will last. Businesses are excited about the prospect of corporate tax cuts, and more optimistic consumers might increase their spending. Individual taxpayers might have to send less of their money to the IRS. And pulling back on regulations might lower prices for consumers and save jobs.
All that sounds like pretty good news. But some people aren’t so sure the economic future will be rosy under Trump. His pick for secretary of labor is a critic of the minimum-wage increases and efforts to expand overtime pay, which has dismayed living-wage advocates. Others are concerned about the possible effect of deporting millions of immigrants or raising tariffs on Chinese-made products on the economy.
Early signs indicate Trump is more than willing to follow through on some of his big promises to his supporters. Assessing the economic fallout from executive actions on issues, such as the border wall and immigration, might take time. Nonetheless, we can makes predictions for how Trump might affect your bottom line based on his early moves as president as well as his campaign pledges. Here are nine things that could get more expensive — at least for some people — in Donald Trump’s America.
1. Your iPhone
Trump has promised to slap a 35% or 45% tariff on Chinese-made goods. If that happens, it could mean higher prices on products, including your beloved iPhone. A 45% tariff could drive up the retail price of an iPhone by $100, The Washington Post estimated.
But even if Trump does impose tariffs — and there’s no guarantee he will — they might not be as steep as promised. A tariff of 15% is more likely, according to Business Insider. That would mean smaller price increases for U.S. shoppers, but they’d still probably end up paying more.
“In general, if tariffs go up by 15%, we tend to find that prices go up, but not usually entirely by 15%,” Columbia economics professor Amit Khandelwal told Business Insider. “But it’s reasonable to expect that prices would go up a sufficient amount.”
2. A six-pack of Corona
China isn’t the only country Trump has singled out for tariff talk. He’s also floated the idea of imposing a 20% tariff on Mexican-made products to pay for the proposed $60 billion border wall. Although the tariff would supposedly be a way to get our neighbors to the south to pay for the wall, the bill would actually go to shoppers in the U.S., experts say.
“The notion that a 20% tariff is a way of forcing Mexico to pay for the wall, it’s just a falsehood. It’s a way of forcing American consumers to pay for the wall,” Edward Alden, a trade expert at the Council on Foreign Relations, told Money. A tariff might trigger a hike in the price of Mexican-brewed beer, such as Corona and Tecate, along with other Mexican products.
The idea of paying more for beer even has some in the president’s own party down. “Simply put, any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea. Mucho Sad,” South Carolina Sen. Lindsey Graham tweeted.
3. Anything else made in China or Mexico
Unfortunately, iPhones and your favorite beach beer aren’t the only items that might get more expensive if tariffs on imports increase during a Trump presidency. A whole basket of goods made abroad could go up in price.
“If he institutes a 35% penal tariff on every export from China, then most of what you buy at Walmart is 35% more expensive,” Roger Entner, a wireless analyst at Recon Analytics, told The Washington Post.
Also, prices on items made in Mexico, such as computer or cars, could increase. The typical American household might end up spending $11,000 more over five years if new tariffs against products made in China, Mexico, and Japan become a reality, a report from the National Foundation for American Policy found.
Trump made his name in real estate, but what effect his election and presidency will have on the housing market is unclear. Homebuilders are optimistic he will eliminate regulations they think hurt smaller builders and housing affordability, CNBC reported.
Mortgage rates were up in the weeks after the election but fell in the first part of 2017. Higher mortgage rates can make it harder for people to afford to buy a home. One of Trump’s first actions as president was to cancel a planned cut in FHA mortgage rates that would have helped some homeowners. The rate reduction would have saved someone with a $200,000 mortgage about $500 in 2017, Bloomberg reported.
The future of fair housing initiatives under Trump is murky. Some are predicting steep cuts to various Department of Housing and Urban Development Programs.
“All federal housing programs are at significant risk,” Diane Yentel, president of the nonprofit National Low Income Housing Coalition, told The Atlantic. Budget cutbacks could mean fewer Section 8 vouchers for low-income people and less money for public housing, which could make housing less affordable for the poorest Americans.
Trump has claimed he’ll lower taxes “across the board.” He said he’ll do it by simplifying the tax code, reducing the current seven tax brackets to three. Most agree such a move would lower taxes for the majority of Americans. But people at the top would save more.
Although the majority of taxpayers would save under Trump’s plan, a handful might end up paying more. The website How Much put together a handy visualization of what Trump’s tax plan could mean for you. People at the very bottom would feel the pinch, as those in the 10% tax bracket will move into a new 12% bracket. Some people at the top of the 28% bracket would get pushed into the 33% bracket.
Digging into the nitty-gritty of Trump’s tax proposal also reveals a few other groups who might see their taxes rise. The president has said he wants to eliminate the Head of Household filing status, which could result in a tax increase for single parents, according to FactCheck. Large families also might see their tax bills rise if the government eliminates personal exemptions.
“Simply put, the middle class as a whole would see a tax reduction, but some middle class families would see a tax increase,” Alan Cole, an economist with the Tax Foundation, told FactCheck.
Among the many items on House Republicans’ agenda might be revamping the federal food stamp program, or SNAP. Tightening eligibility requirements, strengthening work requirements, and creating incentives to get people to buy healthier foods are changes on the table, PBS reported.
More than 45 million people received an average of $126.83 every month in SNAP benefits, and some anti-hunger advocates worry changes to the program could make it harder for poor Americans to afford to eat. But many politicians, both Democrat and Republican, agree SNAP is essential to preventing low-income Americans from going hungry, which probably means big cutbacks are unlikely.
But even Americans who don’t rely on food stamps could find their grocery bills climbing under Trump if he succeeds in building his border wall and deporting millions of undocumented immigrants. Grocery stores eventually would feel the ripple effect of those moves.
Farmers would have to pay workers more, and production might decrease, Eater reported. Asparagus, wine grapes, berries, and peppers are among the products most likely to rise in price, according to The Washington Post. If immigrant labor were eliminated, retail milk prices could also rise by 90%, a study for the National Milk Producers Federation by economists at Texas A&M found.
7. Health insurance
Republicans in Congress want to repeal the Affordable Care Act, arguing the program has been an expensive disaster. Trump also has signaled there are aspects of the ACA he would be open to keeping, such as rules that prevent insurers from denying coverage to people with pre-existing conditions.
Also, if Congress repeals the insurance mandate, as many as 18 million Americans could lose their coverage within a year, a report from the nonpartisan Congressional Budget Office found. Premiums for individual coverage would rise by 20% to 25%. If the Medicaid expansion and insurance subsidies were eliminated, premiums for people buying their own health insurance would increase by 50%. And the number of uninsured would rise to 32 million by 2026.
8. Birth control
One particular consequence of an Affordable Care Act repeal could hit some women directly in the pocketbook. Currently, health insurers must cover birth control without copays.
In practical terms, that can save women up to $50 a month on birth control bills or $1,000 on long-acting contraception, such as intrauterine devices. Overall, the contraceptive mandate saved 6.9 million women $1.4 billion on birth control pills alone in 2013, Reuters reported.
Birth control isn’t the only thing women might pay more for if the ACA is repealed. The law also requires insurers to provide breast pumps to nursing mothers and to cover annual wellness visits, both without a copay. If repealed, women again could find themselves covering a portion of those expenses out of their own pockets.
9. Streaming TV
Binge-watching your favorite Netflix or Amazon Prime shows could get more expensive during Trump’s presidency, some are warning. The newly appointed chairman of the Federal Communications Commission is a vocal opponent of net neutrality, or rules that say your internet-service provider can’t set up roadblocks to what you access on the internet by slowing down certain websites or charging more to deliver particular types of content.
If those rules weaken, it’s possible your internet-service provider could start tacking on extra fees if you want to watch Netflix or use other streaming services.
Netflix, for its part, thinks it’s too popular for internet-service providers, such as Comcast, to risk charging customers more to use its service. But as Netflix CEO Reed Hastings warned, smaller start-up companies don’t have the same advantage. It could hurt them if net neutrality goes away. Opponents of net neutrality argue it inhibits competition. They say getting rid of the rules would actually benefit consumers.