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The looming impact of tariffs
As tariffs on steel and aluminum are set to take effect, many consumers are left wondering how these changes will affect their everyday expenses. Economists warn that the costs of a wide range of items could rise as businesses pass on the increased expenses to consumers.
President Donald Trump’s 25% tariffs on these metals are expected to ripple through various industries, leading to higher prices for goods that rely on steel and aluminum.
What products will see price hikes?
From vehicles to household appliances, the implications of these tariffs are extensive.
For instance, the average price of a new vehicle could increase by $400 to $700, according to BMO Capital Markets. If domestic producers respond by raising their prices, that figure could soar to nearly $1,000. This is particularly concerning for young adults looking to purchase their first car, as the financial burden could be significant.
Moreover, the Insurance Bureau of Canada has indicated that rising vehicle costs will also lead to higher auto insurance premiums, as the cost of claims reflects the increased value of insured items. This means that even if you’re not in the market for a new car, you might still feel the pinch in your monthly budget.
Beyond vehicles: The broader impact on consumer goods
It’s not just cars that will be affected. Everyday items like refrigerators, coffee makers, and even your favorite canned beverages could see price increases due to the tariffs. The aluminum used in packaging drinks means that a simple can of soda could cost more at your local store.
As economist Moshe Lander points out, if it makes a metal sound when you knock on it, it likely contains aluminum or steel.
Even seemingly unrelated products, such as a Tim Hortons doughnut, could be impacted. The costs associated with getting these items to stores may include steel and aluminum, leading to price hikes even if the ingredients themselves don’t contain these metals.
Should you buy now or wait?
With the tariffs set to come into effect soon, many consumers are contemplating whether to make big purchases now or wait. For high-ticket items like appliances, it may be wise to buy sooner rather than later. However, for smaller items or those you don’t plan to purchase for a while, it might be better to hold off. Flavio Volpe, president of the Automotive Parts Manufacturers Association, advises that if you’re considering buying a vehicle, doing so now could save you money in the long run.
As the trade landscape continues to evolve, staying informed about how these tariffs will affect your wallet is crucial. Whether you’re a first-time car buyer or simply looking to replace an old appliance, understanding the potential price increases can help you make smarter purchasing decisions.
