The great tariff shakedown | The Verge

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Economists have tried to warn us. From the start, trade policy experts warned that the tariffs would raise consumer prices and would not create the American manufacturing renaissance promised by the Trump administration. One thing I wrote about tariffs in February keeps coming to mind: When I asked economists and policymakers what high tariffs would actually look like, they were reluctant to get prescriptive. Indeed, each industry works in different ways and each product we have access to comes to us after having touched many hands. It’s not that one day everything will increase in price, or in equal measure – instead, the consumer pain could be prolonged, with price increases or supply disruptions occurring without much warning.

Perhaps the most immediately disruptive pricing policy occurred in September, when the de minimis rule was suspended for all countries shipping small packages to the United States. Overnight, the change affected all packages worth less than $800 that previously entered the United States duty-free. Thanks to the de minimis rule, I’ve been a regular buyer on Japanese eBay for years; on Etsy I bought handmade jewelry from India and antique treasures from the UK. I haven’t bought anything shipped from overseas since this summer, wary of surprise tariff bills. If you have a hobby that relies even in part on physical goods from abroad – photography, crafts, K-beauty, etc. – you’ve probably already formed a new habit before buying anything online: check to see if something is even available to ship to you in the first place. Next, try to understand what, if anything, you’ll owe in additional fees.

That’s probably no surprise: Consumers paid up to 55% of Trump’s tariffs, according to a Goldman Sachs report released in mid-October. And this figure could still increase: The New York Times reported that even some companies that initially absorbed costs instead of passing them on to consumers are now looking for ways to increase profits swallowed up by tariffs.

Another thing that economists told me months ago and which has come to fruition: it’s not just imports that are going to become more expensive. Many people now understand that even products made in the United States often use smaller components made elsewhere, driving up costs for American companies. Data from Harvard’s Pricing Lab shows that it’s not just imported products whose prices have increased: domestic products have also become more expensive. This could be partly due to imported materials or components. But in industries where consumers have more alternatives to U.S.-made imports, domestic manufacturers may also raise their own prices in response to the now more expensive imports. They raise prices because they can.

Other companies have clearly stated that Trump’s tariff policies are leading to changes in their businesses. Sporting and outdoor goods company Orvis plans to close half of its stores by 2026 and reduce its product offerings due to the “unprecedented pricing landscape.” Children’s clothing store Carter’s also said the tariffs were eating into its profit margins and that it would close 150 stores and cut 300 jobs.

New tariffs, particularly those resulting from the end of the de minimis rule, are creating new headaches for consumers. I’ve gotten into the habit of triple-checking where products are shipped from, and if I’m not sure, I message the seller and confirm. Some buyers’ packages are getting stuck in customs and in transit, and UPS told NBC News it is “getting rid of” some shipments amid the backlog.

Producers have also found… creative ways to mitigate the impact of tariffs. For consumers, this year’s Halloween candy could have been smaller as inflation contracted, but also less chocolatey as manufacturers deal with rising cocoa prices. Tariffs are far from the only reason candy is more expensive, but CNN notes that candy makers are coming up with some truly cursed new special flavors that aren’t as chocolatey, like “Cinnamon Toast Flavored Kit Kats.” No, thank you.

The holidays will be another test of the resilience of our supply chains and of Trump’s commitment to his wildly unpopular trade policies. Around 90% of fake Christmas trees are made in China, for example, and some importers have warned that there could be a shortage of decorations this year (shortages are also already being used to encourage shoppers to “stock up” and “get a head start”, so take that as you will).

Trump’s tariffs are also being challenged in court, and the Supreme Court is expected to hear arguments during the first week of November. Instead of going through Congress, Trump imposed tariffs using the International Emergency Economic Powers Act.

It’s hard not to feel like Trump’s tariffs are an ongoing goal, again and again — especially since after hitting some countries and commodities hard, the Trump administration regularly strikes side deals to cut taxes. You know how retailers sometimes raise prices before a sale, so markdowns trick shoppers into thinking they’re getting a good deal? This is what it looks like. Most recently, Trump and Chinese President Xi Jinping reached a “deal” in which Trump agreed to “reduce” tariffs on China by “10%” (the tax is still 47%). In return, China said it would work to prevent fentanyl from entering the United States from China, suspend restrictions on the export of rare earth minerals critical to the automotive and technology industries, and purchase several million tons of American soybeans over the next few years (recall that Trump also triggered a soybean crisis during his last presidency).

I say “agreement”, “reduction” and “10%” because these terms are far from settled. If the last few months are anything to go by, the framework of the deal could be just a clever piece of advertising away from being completely destroyed. Trump’s public blandishments—Apple’s gold plate, the Korean crown, Japan serving Trump American rice at lunch, YouTube throwing millions into Trump’s ballroom, and Nvidia’s Jensen Huang bragging about his support—are pretty shocking. The promises made behind closed doors while negotiating these deals are apparently fickle enough to change on a moment’s notice; the only certainty is that the rest of us will feel it no matter what.