Federal Reserve officials on Wednesday raised their prediction of what inflation will look like at the end of the year from 2.5% to 2.7%. That’s likely taking into account the tariffs that are already in place — for example, the 20% on Chinese goods.
But in about 10 days, the next round of tariffs promised by the Donald Trump administration may — or may not, who really knows? — come into effect. Some of the 25% tariffs on Mexico and Canada would start then too. Tariffs haven’t shown up yet on a lot of price tags on store shelves and in car lots, but they are in the pipeline.
MFA Inc., a farmers cooperative based in Columbia, Missouri, is owned by 40,000 ranchers and farmers. It sells a lot of fertilizer.
“You know, the two biggest wild cards in our business are weather and the government,” said Chris DeMoss, senior director of plant foods.
He said the less predictable one is the government. Potash fertilizer from Canada was going to be tariffed at the beginning of this month, but that was pushed back to April 2.
“They’re gonna have an impact, there’s no doubt, ’cause 80% of what we use domestically comes from Canada,” said DeMoss.
But whatever that impact is, it will be delayed.
“There’s a lot of tons that were already in place for this spring, so we’ll probably have a better understanding of what all this means as we get into the summer period and into the fall,” he said.
For other products, the delay is gonna be much shorter. Twenty percent tariffs on goods from China are gonna start showing up on stickers in April, predicted Omair Sharif, head of Inflation Insights.
“A lot of sort of furniture and household goods. Things like household appliances. Furniture in particular is a big one. Cookware, cutlery, glassware, rugs,” he said.
Seventy-one percent of our cookware and cutlery is imported from China, Sharif said. So is 45% of all footwear. And the cost increases for these goods tend to get handed on to consumers.
That’s what happened with washing machines in 2018. “Tariffs went up 20%, prices went up 18%,” Sharif said.
Anderson Economic Group forecast the impact of multiple layers of tariffs on cars over the next few months.
“We found that the typical model produced by these manufacturers in North America would see a tariff cost increase of between $4,000 and $10,000,” said CEO Patrick Anderson.
His advice? Buy that car now.
Tomatoes from Canada and avocados from Mexico will likely see jumps in April. Other industries wouldn’t be hit with major effects — tariffs on oil, for example.
“Canada would end up eating that because we have so much supply here,” Anderson said.
In the construction sector, builders are nervous about the cost of materials.
“Steel and aluminum is one, and also some goods imported from Canada such as lumber are very important for housing. So that could have an outsize impact on inflation for the U.S.,” said Elijah Oliveros-Rosen, chief economist for emerging markets at S&P Global Ratings.
But for now, it’s still mostly a waiting game.
