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President-elect Donald Trump is set to take office for a second time on Jan. 20, and big changes are expected due to his proposed policies. While he has promised the country a shift in the economy, it might not be in the way people expect. Instead of more money in the pockets of Americans, things could get more expensive.
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Trump has promised to stick a 10% tariff on global imports, a 60% tariff on goods coming from China and, until his conditions are met, a 25% tariff on Canadian and Mexican imports, which he would enact on the first day of his new term and would likely increase the prices of everyday household items.
“The U.S. imports various electronic devices, such as tablets, smartphones and laptops, from China,” said Anna Yen, CFA, with MoneyLion. “The hike in the import tariffs can result in a price rise of up to 46% on these items. Therefore, they can become less affordable for the middle class.”
But that’s not all. Look for higher prices on appliances, such as refrigerators, blenders and dishwashers. “As it is, these items are expensive enough,” Yen said. “The hike in import tariffs could push their prices further by around 19%.”
Everyday goods aren’t the only things consumers will likely pay more for. Here are four things the middle class might not be able to afford once Trump returns to the White House.
In 2024, 20.8 million people signed up for the Affordable Care Act, per the U.S. Department of the Treasury, and prices are expected to soar under Trump, because he wants to dismantle parts of the ACA.
“Monthly premiums might skyrocket by 20%-30% for middle-class families, pre-existing conditions could once again become a barrier to coverage, many employers might reduce health benefits to cut costs, and prescription drug prices could increase without price controls,” said finance expert Andrew Lokenauth, founder of TheFinanceNewsletter.com.
Americans enrolled in the ACA will likely see cost changes when a key tax credit from the COVID-19 pandemic expires at the end of this year. According to the KFF, if Trump doesn’t renew the subsidies, which cuts costs for millions, premiums could double in some states.
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Pursuing a higher education could cost even more under Trump, and students should start bracing for costly changes, according to Lokenauth.
“Federal student loan interest rates might increase, income-driven repayment plans could become more restrictive, public university funding might decrease, leading to higher tuition, and student loan forgiveness programs could be eliminated or reduced,” he explained.
High interest rates are just one of the many difficulties homebuyers have dealt with over the last few years, but the Federal Reserve reduced the interest rate three times in 2024, bringing the range down to 4.25% to 4.5%. In September, the Federal Reserve slashed the interest rate by half a percentage point for the first time since 2020. In November, the Fed reduced the rate by another 0.25 and another 0.25 in December.
Another potential win for the market is Trump’s promise of more affordable housing, but according to Lokenauth, homebuyers could still face financial challenges.
“Mortgage rates might climb due to economic policies, first-time homebuyer programs could face cuts, property taxes might increase in middle-class neighborhoods, and the mortgage interest deduction could be modified, affecting affordability,” he explained.
Trump’s policies could make housing unattainable for some.
“President-elect Trump will accelerate the growth of the budget deficit more quickly than Vice President Harris would,” Michael Nourmand, president of the brokerage Nourmand & Associates, told CNBC. In addition, he stated that Trump’s proposed tariff plans could also boost inflation and raise prices.
Leading up to the election, Trump regularly touted his tariff plans, but his policies are likely to raise the price of cars.
“There’s no such thing as a 100% American vehicle,” Ivan Drury, director of insights at Edmunds, told CNBC. “There’s so much complexity, even though it’s a seemingly straightforward thing.”
But that’s not the only way transportation costs could increase. Lokenauth explained that gas prices might rise due to international trade policies, public transportation funding might decrease, and electric vehicle tax credits could be eliminated under the Trump administration, which the president indicted while campaigning.
Nobody can predict what policies Trump will enact once he returns to the White House, but significant changes will come if his planned tariffs are imposed, and prices are expected to increase.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. For more coverage on this topic, please check out 7 Little Luxuries the Middle Class Will Be Able To Afford When Trump Takes Office.
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This article originally appeared on GOBankingRates.com: 4 Things the Middle Class Likely Won’t Be Able To Afford Once Trump Takes Office
