The Trump administration’s tariff policies could significantly increase the amount of gift spending American consumers make during the Thanksgiving and Christmas holidays, according to an analysis.
Online lending company LendingTree applied the Trump administration’s tariff programs to data on gift purchases made by American consumers at the end of last year and estimated that the total cost burden on consumers and retailers would increase by $40.6 billion, CNBC reported on the 2nd. Consumers are estimated to shoulder about 70% of this, or $28.6 billion.
If the current tariff levels had remained in effect last year, each American consumer would have spent an additional $132 (approximately 190,000 won) on gifts. Electronics were found to have incurred the largest increase, with an average increase of $186 (approximately 266,000 won) per person, while clothing and accessories were estimated to have increased by $82 per person. Retailers are estimated to bear the remaining $12 billion (approximately 17 trillion won) of the increased costs due to the tariffs. Although the analysis mechanically applies the current tariff effects to last year’s consumption data, it is seen as suggesting that tariffs could have a significant impact on American consumers and businesses ahead of this year’s holiday shopping season.
Matt Schultz, chief consumer finance analyst at LendingTree, said, “For most Americans, an additional $132 in holiday gift spending is significant.” “Even if the additional costs aren’t enough to shake household finances, they could have a real impact on many families,” he said.
“Consumers may cut back on gift spending this year or take on additional debt.”
Experts assess that the impact of tariffs on US inflation is already visible. Following the interest rate cut decision on the 29th, Federal Reserve Chairman Jerome Powell said in a press conference, “Higher tariffs are pushing up the prices of some goods, which in turn is pushing up the overall price index.”
While Powell believed the tariffs’ impact on inflation would be a one-time effect, he did not rule out the possibility that they could continue to accelerate inflation.