Trump’s threats against China make Americans stock up on electronics

President-elect Donald Trump promised 60% taxes on Chinese imports and 25% on products from Mexico and Canada

Americans are rushing to stock up on cars, appliances and other high-value imports in anticipation of new tariffs from the Trump administration — a spending spree that could reignite the inflation shoppers are hoping to avoid.

President-elect Donald Trump has promised to enact across-the-board tariffs as soon as he takes office in January, a move that economists say could raise prices for nearly every type of import, including food, cars, computers and gasoline.

Although Trump offered few details, he said his planned policies would target the United States’ three largest trading partners, with 60% tariffs on all Chinese imports and 25% tariffs on goods from Mexico and Canada.

There are signs that price-sensitive households and businesses are already changing their spending behavior to protect themselves against further cost increases. New data this week showed that Americans spent $3.6 billion more on vehicles and auto parts in November than the previous month — a notable increase in an otherwise weak retail sales reading.

Spending on electronics and appliances also rose last month, which economists attributed to a combination of Hurricane Helene-related repairs and households bracing for new rates.

And while it’s unclear whether this surge in demand is driving up prices yet, economists say it’s notable that both appliances and new vehicles became more expensive in November, even as inflation slowed in other areas.

“It’s clear that people are buying early,” said Diane Swonk, chief economist at KPMG. “This becomes a self-fulfilling prophecy: the more you buy, the more you raise prices in anticipation of price increases.”

Near Orlando, Deena Pryor accelerated her plans to buy a car after Trump’s victory, figuring that an early purchase could end up saving tens of thousands of dollars. She and her husband bought a Ford Explorer a few weeks ago and are planning to buy a dishwasher and stove before the end of the year.

“It just made sense after the election,” said Pryor, 42, an analyst at a software company. “I was like, ‘Wow, wait a minute, he’s talking about tariffs. We should go ahead and buy it now.’”

She is not alone. Americans are increasingly concerned that new policies, especially tariffs, could lead to a resurgence in inflation, according to consumer research from the University of Michigan.

The share of consumers who say it’s a good time to buy appliances, electronics and other big-ticket items “to avoid future price increases” has increased since the election, researchers there found.

At AAA Appliances in Chantilly, Virginia, sales of Frigidaire refrigerators have nearly quadrupled since the election. Consumers are also buying ovens, dishwashers and washing machines in hopes of avoiding higher costs, said owner Robert Pearson.

“The phones started ringing immediately, with people saying ‘I heard we’re going to have new rates, we want to buy now,’” Pearson said. “There has been a rush on everything since the election.”

Pearson, who keeps a 10,000-square-foot warehouse stocked to the brim, says there isn’t much room for him to buy more.

Instead of stockpiling imports, it is looking for ways to offset potential price increases for customers. Buyers appear much more concerned about this round of price increases than they were during the Trump administration’s previous tariffs, he said, in part because of their recent experiences with inflation.

“We don’t know what tariffs there will be or how much they will impact the average consumer, but my focus has been on making sure the consumer doesn’t get hit with all of this,” he said. “We will have to find a way to absorb the costs somehow.”

At 2.7%, inflation has declined significantly from a recent peak of 9.1%. While prices for many products stabilized in November, there were some notable exceptions: Appliances saw their biggest increases since January, while new vehicle prices rose at the fastest rate in more than two years, federal data shows.

Economists say these increases could become even more pronounced in the coming months if tariffs take hold.

On Wednesday, Federal Reserve Board Chairman Jerome H. Powell said policymakers were just beginning to consider potential new tariffs in their economic forecasts for next year. It’s too early to say, he said, exactly how such policies might affect prices.

“We don’t know what will be tariffed, from which countries, for how long,” Powell said at a news conference. “We don’t know if there will be retaliatory tariffs. We don’t know what the transmission of either of these will be to consumer prices.”

While the specter of tariffs isn’t necessarily creating “new demand,” it is encouraging some consumers to buy “earlier than they otherwise would,” said Neil Saunders, retail analyst at GlobalData, an analytics and consulting firm.

Rutger Burgers was planning to buy a minivan next year after the 10-year warranty on its current car ran out. “But the election results raised our concerns that tariffs could cause prices to rise dramatically,” said Burgers, 44, an engineer in Forest, Virginia. “It gave us the push we needed.”

When he saw a good deal a few days later, he bought a Kia Carnival months ahead of schedule — for about $2,500 below the manufacturer’s asking price.

It’s not just consumers who are stocking up. Big retailers too. Costco is looking to “pull inventory purchases forward” to stay ahead of tariffs, Chief Financial Officer Gary Millerchip told investors last week.

Meanwhile, some of the country’s biggest retailers, including Walmart and Lowe’s, have warned that tariffs could force them to raise prices next year. At Best Buy, executives say new import duties will almost certainly result in markups on popular electronics. Cellphone prices could rise 26%, while laptops and tablets could rise 46%, according to the Consumer Technology Association, a trade group.

“Of course we see that the customer ends up bearing some of the cost of the fees,” Best Buy CEO Corie Barry said on an earnings call last month. “These are goods that people need, and higher prices don’t help.”

Small business owners say they are struggling to keep up. Many don’t have the extra money they need to buy – and store – extra products, which puts them at a disadvantage compared to larger retailers.

“We just don’t have the capital to stockpile,” said Michael Spadaro, co-founder of Cork & Mill, a Charlotte-based company that sells imported housewares and kitchenware on Amazon. “We normally have about 100 days of stock at a time, and for us to suddenly buy a year or two’s worth of mixing cups – it’s just not something we can do.” (Amazon founder Jeff Bezos owns The Washington Post.)

New across-the-board tariffs proposed by Trump could end up costing U.S. families an average of $3,000 next year, according to a recent analysis from the nonpartisan Tax Policy Center, a Washington think tank.

Economists note that low- and middle-income families will likely feel the biggest impact, with tariffs reducing their after-tax income by 3.5%, according to estimates from the Peterson Institute for International Economics, a nonpartisan think tank.

These households are also the least likely to have cash available to stockpile goods now, before the policy changes take effect.

For those who can afford to buy big-ticket items in advance, the past few weeks have been filled with strategic decisions about exactly what to buy. Kristen Scalise recently bought a house in Philadelphia and is now rushing to fill it with new appliances before January.

She has already bought a stove and a refrigerator, and is thinking about buying a dishwasher, although there isn’t room in her kitchen for one yet. Meanwhile, she is putting off more labor-intensive projects, like remodeling the kitchen and replacing a circuit board to free up money for imported goods.

“I started thinking about things differently when I realized tariffs were coming into play,” said Scalise, 36, who works in marketing. “Literally the morning after the election, my first thought was: I need to buy a refrigerator; I can’t wait until next year.”

With information from The Washington Post*