MIAMI (WSVN) - South Florida businesses and their consumers are bracing for the impact that could come from wide-ranging tariffs announced by President Donald Trump.
Being dubbed “Liberation Day” by the White House, Trump on Wednesday afternoon announced reciprocal tariffs on nations that have tariffs on the United States.
Economists largely agree that the plan is a tax and will be passed down to the American consumer.
“The rest of the world has been waiting on this. They saw him as president once, they saw him on the campaign trail, and they are ready to retaliate,” said Douglas Holtz-Eakin, Chief Economist of the White House Council of Economic Advisers under George W. Bush
One of those industries being targeted is automobiles and their parts.
Trump announced a 25% tariff on all imported automobile and its parts. Those tariffs are set to go in effect Thursday.
“New cars, from now on, they’re going to increase,” said a car salesman.
Some international manufacturers, like Korean-based motor group Hyundai, got ahead of the president’s announcement by announcing a relocation of one of their Metaplants to Georgia.
The group called the move a “commitment to and investment in the U.S.”
Yale University released a simulation of what a hypothetical 20% across-the-board tariff would mean for everyday goods.
According to their analysis, “The price level rises by 2.1-2.6% in the short run, the equivalent of an average per household consumer loss of $3,400-$4,200 in 2024.”
For cars in particular, prices could rise “7.8%…For the average new car sold in 2024, this would be the equivalent of an extra $3,700 to the price, with foreign cars and cars with high foreign content relatively more exposed,” the simulation said.
Back in South Florida, consumers and local businesses are bracing for impact to their pocketbooks following the announcement.
“Isolationism doesn’t work,” said real estate developer Ryan Methot.
Local business owners like Marlow Darrington, who owns Da Bohamian Bazaar, said consumers may absorb the additional fees brought on by the tariff plan.
“If you come into my boutique, you’re going to pay it,” she said. “I pay it, I pass it down to you. You have family and kids. You have discretionary and disposable income. It’s going to affect you, the American person.”
Other industries like food production, agriculture and beer could potentially see their prices rise, which would impact South Floridians.
“If you buy a car, it’s more taxes. If you buy rice and beans, there’s more taxes. If you buy milk, coffee, everything’s gonna go up. It’s going to affect working class people of this country,” said Luis DeRosa. “It’s terrible. It’s a tax.”
The Budget Lab at Yale said that under their 20% simulation, “food prices rise 3.7%, about double the recent rate of grocery inflation. Computers, clothing, and crops all see double-digit percentage price increases.”
So, under this simulation, South Floridians, as well as everyday Americans, could expect to pay “$3.70 cents more for every $100 spent at the grocery store.”
In terms of produce like fruits and vegetables, prices could rise 4.9%, says the simulation.
For housing material prices, such as lumber, it remains to be seen how much the price rises depending on where it is sourced from.
While Yale’s simulation assumes a 20% tariff, Trump’s plan varies from as low as 10% to as high as 50% for some countries.
The Trump administration remains confident in its plan. The White House said it could generate $6 trillion of revenue in the U.S. over the next decade from the tariffs.
The plan would make it the third-largest tax increase in U.S. history, according to the Tax Foundation.
The impact of some of those tariffs is set to take effect immediately while others will take effect in the coming days.
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