The Hidden Cost of Tariffs: What They Mean for Your Wallet

By: Marisa Calderon, President and CEO of Prosperity Now

Imagine you’re at the grocery store, and the price of tomatoes has doubled. Meanwhile, your dream of owning a home drifts further out of reach as construction costs skyrocket. These aren’t hypothetical scenarios — they’re likely outcomes of new trade policies. On April 2, tariffs on many goods from Mexico and Canada will take effect, with more expected to follow. Shoppers could see price hikes at the grocery store within weeks, especially on fresh produce, while businesses that rely on imported materials — like homebuilders and car manufacturers — may also start to feel the strain.

Tariffs might seem like a complex policy issue, but their effects are simple: they raise costs for businesses and consumers. From food to cars to housing, these added costs trickle down to everyday Americans, making it harder to afford basic necessities.

Why Trade Matters to Americans

The U.S. economy depends on trade. In 2023, the U.S. imported more than $475 billion in goods from Mexico and exported $320 billion in return. Canada, another key partner, sent $418 billion in goods to the U.S. while purchasing $354 billion from American businesses.

Despite trade tensions, China also remains a major supplier. The U.S. imported $448 billion in goods from China last year while exporting $148 billion in return.

These trade relationships fuel industries, create jobs, and keep goods flowing at competitive prices.

How Tariffs Raise Prices

Tariffs are taxes on imported goods, making them more expensive. While they are sometimes used to protect domestic industries, they also increase costs for businesses that rely on imported materials. These costs get passed down to consumers, leading to higher prices on everyday goods.

Tariffs can also lead to retaliation from other countries, which may impose their own trade restrictions. This can slow down economic growth, hurt small businesses, and reduce job opportunities.

What Will Get More Expensive?

Here’s how new tariffs could affect the prices of common goods:

• Groceries: Mexico supplies a large portion of fresh produce, including tomatoes, berries, and avocados. Tariffs could make these items more expensive at the grocery store.
• Cars: Many U.S. automakers rely on parts made in Mexico. A 25% tariff on Mexican imports could raise car prices.
• Homebuilding: Canada is a major supplier of lumber and construction materials. The National Association of Home Builders estimates a 25% tariff could increase the cost of building a single-family home by $7,500 to $10,000.
• Electronics: China exports a wide range of consumer electronics to the U.S., including smartphones, laptops, and televisions. A 10% tariff on these imports could lead to higher prices for consumers and businesses.

Tariffs don’t just affect shoppers. Small businesses — America’s biggest source of jobs — also feel the squeeze. Higher costs make it harder for them to expand, hire workers, or stay competitive.

A Smarter Path Forward

Tariffs act like a hidden tax on everyday life. They don’t boost wages, lower housing costs, or make it easier to start a business. Instead, they raise prices without solving the bigger challenges facing American families.

A stronger economy starts at home. Instead of making goods more expensive, we need policies that create good jobs, support small businesses, and increase the supply of available homes. Investments in manufacturing, infrastructure, and job training can help businesses grow without forcing families to pay more at the checkout line.

Trade policy shapes our economy, but it should be designed to help, not hurt, the real people who keep the economy running. As new tariffs take effect, it’s important to ask: Are they making life easier for working families, or just making it more expensive? At the end of the day, economic policy isn’t just about the numbers — it’s about the people. The choices we make now will determine whether families can build a secure future or just struggle to keep up.

Financial security shouldn’t be out of reach. When families don’t have to choose between paying the rent and affording groceries, they have the stability to plan ahead, save, and invest in their futures. That kind of security doesn’t just benefit individuals, it supports communities, grows businesses, and fuels a stronger economy for everyone.

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About Prosperity Now — Since 1979, Prosperity Now has been a trusted leader in strengthening financial security, expanding access to capital, and ensuring economic stability for businesses, families, and communities. We work across sectors to develop practical, scalable solutions that create lasting change. Through innovation, strategic investment, and collaboration, we build the infrastructure needed to sustain small business growth, housing opportunities, and financial well-being in an evolving economic landscape. Learn more at www.prosperitynow.org.