The tariff whiplash continued on Wednesday, with President Trump pausing “reciprocal” tariffs on most countries for 90 days while imposing still higher tariffs on China.
The steep China tariffs could ripple through the U.S. economy: Many of the consumer electronics and much of the discounted clothing that Americans buy are shipped from China, and higher tariffs could result in higher prices for shoppers.
Here’s what you need to know about the latest tariff developments:
What are the tariffs that have been imposed on China?
Mr. Trump’s reciprocal tariffs went into effect early Wednesday, but hours later, he paused the levies on most countries.
China was the exception: Mr. Trump said he would raise tariffs on Chinese imports to 125 percent — the result, he said, of Beijing’s unleashing a new round of retaliation against the United States.
Mr. Trump has said the goal of the tariffs is to encourage manufacturers to make more products in the United States. While he and his advisers acknowledge that could mean higher prices for Americans in the near term, Treasury Secretary Scott Bessent recently told NBC that American prosperity was about restoring factory jobs lost to foreign competition, not about the ability to buy “cheap baubles from China.”
What other tariffs are in effect?
The pause means that other countries have a 90-day reprieve from the higher rates that went into effect Wednesday. Mr. Trump retained a 10 percent universal tariff that he had instituted on Saturday.
Some other previous tariffs are also still in effect: Foreign aluminum and steel are subject to 25 percent tariffs, as are imported vehicles. Those taxes on imports could lead to higher prices for items like cans of beer and cars — in fact, the effects of the tariffs are already reverberating through the auto industry.
What could get more expensive because of the tariffs on China?
China’s factories produce more than those in the United States, Germany, Japan, South Korea and Britain combined, and many of the products imported to the United States come from China.
The increased tariffs will have significant repercussions on the American economy, Wendong Zhang, an assistant professor of applied economics and policy at Cornell, told The New York Times on Wednesday. China is a major source of imported consumer electronics in the United States: 73 percent of smartphones, 78 percent of laptops and 87 percent of video game consoles.
China also exports 77 percent of the toys coming into the United States, Mr. Zhang said.
Low-cost clothing could also get more expensive. The discount retailers Shein and Temu rely on Chinese vendors and make up about 17 percent of the discount e-commerce market in the United States for fast fashion, toys and other consumer goods, according to the Congressional Research Service. In addition to the tariffs, those companies will be affected the closure of a loophole that allowed retailers to send goods directly to American consumers without paying taxes.
Will groceries get more expensive?
When Mr. Trump initially instituted tariffs on Mexico and Canada in February, grocery prices seemed likely to rise because Mexico and Canada are two of the largest exporters of food to the United States. The president later suspended those tariffs under the provisions of the U.S.-Mexico-Canada Agreement, which probably prevented tariff-related price increases on products like avocados from Mexico and processed baked goods from Canada.
Still, the U.S. imports food from a slew of other nations, and food analysts have warned consumers to expect price increases in the grocery aisles, especially on perishable foods. Bananas from Guatemala and grapes from Peru, for example, could get more expensive, and so could seafood from Vietnam and India.
Shoppers could also see prices go up on coffee, and on wines from the European Union, Argentina, Australia and other regions.
Should you stock up on anything?
Given the potential for higher prices on a wide variety of goods, consumers may feel tempted to shop, and to do it now.
In the wake of Mr. Trump’s tariff announcements, some Americans began making big purchases they had put off, like replacing home appliances or buying a new car, while others headed to Costco to buy water, soap and mouthwash in bulk.
Some shoppers have also raced to replace their iPhones amid fears that the price could climb significantly, Bloomberg reported. Apple makes about 90 percent of its iPhones in China, and even before the additional levies added on Wednesday, Morgan Stanley analysts estimated that the tariffs would add billions to Apple’s annual costs.
But as explained by Ron Lieber, The Times’s money columnist, there are a few important considerations before stocking up or making major purchases right now. Buying extras of things costs money and takes up space in your home, and going into debt to make those purchases, or speeding up a big expense to beat potential price increases, could wipe out your savings. Plus, he noted, price increases would need to be significant and last for a long enough time for them to outweigh the upfront cost of buying extra products.
What does the stock market’s reaction mean for consumers?
Stocks surged on the news of the 90-day pause: The S&P 500 jumped 9.5 percent on Wednesday, the sharpest single-day gain since the 2008 financial crisis.
While those gains recovered most of the ground lost since Mr. Trump announced new tariffs on April 2, the index remains 11.2 percent below its most recent high, in February. Some analysts warn of more volatility. The markets have been rocked by uncertainty in the weeks since Mr. Trump began rolling out his tariff plan, with companies unsure of how the trade war could affect their business.
And that volatility has weighed on consumers who invest in the market or plan to retire soon. A dip in stock prices could wipe out savings needed for retirement; scare investors into selling stocks, which could cause them to miss out on future gains; or scare young people from investing in the markets altogether, which could hurt long-term earnings.
