Topline
The price tag for Apple’s iPhones may increase by more than 40% after President Donald Trump announced sweeping reciprocal tariffs on U.S. trade partners, analysts said Thursday, as Trump’s trade policies will likely increase prices across several imported goods, including new cars, coffee, chocolate and other products. President Donald Trump announced sweeping reciprocal tariffs on U.S. trade partners, a move that
... More will likely impact several industries. Key Facts
Trump, in an address Wednesday,
announced tariffs across several countries in Europe, Asia, Africa and the Pacific, with a baseline tariff of 10% (see a
full list of countries impacted by tariffs).
Get Forbes Breaking News Text Alerts: We’re launching text message alerts so you'll always know the biggest stories shaping the day’s headlines. Text “Alerts” to (201) 335-0739 or sign up here . What Goods Could Be Impacted By Trump’s Tariffs?
Prices will likely increase on products sold by U.S.-based companies as they pay taxes on imported foreign goods, though it’s not immediately clear which prices would be directly impacted or how each company would respond to tariffs.
What Other Goods Could Be Impacted?
Under 25% tariffs previously announced for goods manufactured in Mexico and Canada, prices for some products may increase as more markets are impacted.
Could Trump’s Tariffs Impact Drug Prices?
Pharmaceuticals were among the goods exempt from Trump’s reciprocal tariffs, though he has previously
floated tariffs on pharmaceuticals that would be “25% and higher.” It’s unclear whether drug prices would be directly affected by tariffs, though researchers
suggest a tariff on imported drugs from Canada would add $750 million in costs. Diederik Stadig, a healthcare analyst at ING,
estimated tariffs would increase prices of low-cost, generic drugs by up to $0.12 per pill, and more expensive drugs—those used to treat cancer, among others—by up to $10,000.
Will Temu And Shein Be Impacted By Tariffs?
The Trump administration
announced late Wednesday the “de minimis” trade provision, which allowed companies to send packages valued at $800 or less to the U.S. without paying duties or certain taxes, would be eliminated starting May 2. Low-cost, fast-fashion retailers Temu and Shein have relied on the exemption for years, as the Biden administration
cited “overuse and abuse” by the companies to alter the provision in 2024. Haul, Amazon’s low-cost retailer that relies on third-party sellers and China, has also
reportedly relied on the exemption. All goods that would previously qualify under the de minimis exemption will now be subject to additional charges of about 30% of their value or $25 per item, the White House said.
Canada Hits U.s.-Made Vehicles With Retaliatory Tariffs
Canadian Prime Minister Mark Carney
announced Thursday that Canada will match 25% tariffs on all vehicles imported from the U.S. not subject to the U.S.-Mexico-Canada trade agreement. The tariffs will not impact auto parts “because we know the benefits of our integrated production system,” Carney said, adding Canada is “developing a framework for auto producers to avoid our counter tariffs, as long as they maintain their production and investment in Canada.”
Surprising Fact
Stellantis will pause production at two assembly plants in Canada and Mexico in response to Trump’s auto tariffs,
according to a company memo obtained by CNBC. About 900 U.S.-based employees will reportedly be temporarily laid off as a result. Stellantis relies on a Canadian plant to manufacture Chrysler Pacifica and Dodge Charger Daytona EV vehicles, while its Mexican facility produces the Jeep Compass SUV and Jeep Wagoneer.
Will Temu And Shein Be Impacted By Tariffs?
The Trump administration
announced late Wednesday the “de minimis” trade provision, which allowed companies to send packages valued at $800 or less to the U.S. without paying duties or certain taxes, would be eliminated starting May 2. Low-cost, fast-fashion retailers Temu and Shein have relied on the exemption for years, as the Biden administration
cited “overuse and abuse” by the companies to alter the provision in 2024. Haul, Amazon’s low-cost retailer that relies on third-party sellers and China, has also
reportedly relied on the exemption. All goods that would previously qualify under the de minimis exemption will now be subject to additional charges of about 30% of their value or $25 per item, the White House said.
Contra
The White House
argued late Wednesday the tariffs would not impact consumer prices, citing a statement from former Treasury Secretary Janet Yellen last year: “I don’t believe that American consumers will see any meaningful increase in the prices that they face.” The quote
appears to cut a portion of an interview with Yellen, who later said tariffs were “very carefully targeted” at sectors already supported by the Biden administration. Ford told
Reuters the company will offer employee-rated discounts to all consumers starting Thursday. The company builds about 80% of the vehicles it sells in the U.S. domestically, though it’s unclear whether Ford will continue offering the discount as the automaker
relies on production in Mexico and Canada. Trump warned CEOs of some automakers not to raise their car prices in a phone call last month, the Wall Street Journal
reported , and he later
said he “couldn’t care less” if foreign automakers raise their prices in response to tariffs.
Key Background
During what Trump referred to as “
Liberation Day ” on Wednesday, the U.S. implemented reciprocal tariffs against more than 180 countries. Trump said each rate was roughly half of the total charges imposed on the U.S., arguing his approach was “kind.” Details about the tariffs were largely unknown before Trump’s announcement, as the White House was “perfecting” the rates hours earlier, White House press secretary Karoline Leavitt said. Trump had floated a 20% universal tariff on all imported goods during his reelection campaign, and Bessent said last month tariffs would target the “dirty 15,” or the 15% of countries that account for most of the trade with the U.S. Trump has already implemented a 25% tariff on all products from Canada and Mexico not subject to the U.S.-Mexico-Canada trade agreement, in addition to a 10% tariff on Chinese imports and a 25% tariff on all steel and aluminum imports.
Further Reading
