Trump says he's going to impose new tariffs: When could it impact your wallet?

(NEXSTAR) — President-elect Donald Trump said Monday that he plans to impose new tariffs on goods from Canada, China, and Mexico on his first day in office. While that day is roughly two months from now, you may already be concerned about how the tariffs could impact your wallet.

In multiple Truth Social posts, Trump said he would enact 25% tariffs on all goods from Canada and Mexico, and another 10% on Chinese goods — many of which, as The Hill previously reported, are already under tariffs Trump imposed in his first term.

According to the president-elect, these tariffs are intended to force those countries to improve their border security and crackdown on the inflow of drugs into the U.S.

Trump asserts that tariffs — basically import taxes — will create more factory jobs, shrink the federal deficit, lower food prices and allow the government to subsidize childcare. He has also claimed tariffs are paid for by foreign countries, which isn’t the case. 

In fact, it is importers — American companies — that pay tariffs, and the money goes to U.S. Treasury. Those companies, in turn, typically pass their higher costs on to their customers in the form of higher prices. That's why economists say consumers usually end up footing the bill for tariffs.

Speaking with CBS, Gabe Horwitz, senior vice president for the economic program at left-leaning think tank Third Way, said prices for consumers “are absolutely going to rise.” A recent report from Third Way suggested the typical American family’s annual grocery bill may increase by nearly $200 under Trump’s tariffs.

According to that report, other categories like clothing, over-the-counter medicines, and assorted home goods could also become more expensive. An analysis by The Tax Foundation estimated consumers could pay an additional $625 in taxes under Trump’s proposed tariffs, while the National Retail Federation estimated the annual cost per household in the U.S. could jump $7,600. The Peterson Institute for Internal Economics said a middle-income family could pay an extra $1,700 a year, USA Today reports.

Walmart, Lowe’s, and Best Buy have already warned that consumers could bear the brunt of Trump’s potential tariffs. 

When we may begin feeling those impacts, and which products would be most impacted, is harder to predict. 

Walmart CFO John David Rainey told CNBC earlier this month that it was too soon to point to the products that will cost more due to tariffs. He added, however, that about two-thirds of goods sold at Walmart are made, grown, or assembled in the U.S. 

CNBC also reported Lowe’s CFO Brandon Sink shared similar sentiments during the company’s latest earnings call, saying “timing and details remain uncertain at this point.”

The prices on your favorite items may not jump overnight, however. Speaking with ABC News last week, Ryan Sweet, chief U.S. economist at Oxford Economics, said “tariffs don’t take effect immediately.”

"Even if President Trump signs an executive order on day one, you're looking towards the tail end of next year, early 2026 before you start to see these prices hike," he told the outlet.

Companies like Walmart, Best Buy, and Lowe’s have dealt with tariffs before, however, and say they have all been preparing for them to be enacted again. Many are already stocking up, the Wall Street Journal reported last week.

It’s also possible the tariffs will fizzle. 

The U.S.-Mexico-Canada free trade agreement forbids just imposing tariffs on other member countries. And it’s not clear whether the economy could even tolerate sudden levies on imports: Auto plants on both sides of the border rely on each other for parts and components, and some production lines could screech to a halt.

Economists are generally skeptical of tariffs, considering them to be a mostly inefficient way for governments to raise money. By raising the price of imports, tariffs can protect home-grown manufacturers. They may also serve to punish foreign countries for committing unfair trade practices, like subsidizing their exporters or dumping products at unfairly low prices.

The Associated Press contributed to this report.