When Donald Trump was campaigning for president, he wasn’t shy about sharing his intent to impose strict tariff policies on trade partners. In early April, he made good on that promise, instituting a 10% universal tariff as well as reciprocal tariffs on more than 60 countries.
The stock market responded quickly to Trump’s tariffs, with major indexes plunging and see-sawing over multiple days as the crisis worsened. In the face of so much uncertainty, many major investment banks have changed their recession forecasts for the worse.
The Trump administration then announced a 90-day pause on most tariffs on Wednesday. At the same time, Trump increased the tariff rate on goods brought in from China to 125%. “The U.S. tariffs will slam China hard, but China’s retaliation will also cream the U.S. economy,” said Mark Zandi, chief economist at Moody’s Analytics.
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It’s unclear what will happen after the 90-day pause, so it’s not a bad idea to stock up on some key products or services as long as you do so with caution.
Given these new policies and the likelihood of a recession, it’s important to recognize that virtually any imported product could get more expensive in the coming weeks and months. With that in mind, here are some items retirees may want to purchase sooner rather than later.
Vehicles
Imported vehicles are subject to Trump’s new tariff policies, so expect to see increased prices. But American cars and trucks won’t be immune.
Several U.S.-made vehicles include parts imported from overseas. As those parts become more expensive to procure, the cost will be passed along to drivers. For context, Anderson Economic Group expects tariffs to raise car prices by $2,500 to $5,000 for the least-impacted U.S. cars, and up to $20,000 for certain imported vehicles.
If you’re a retiree whose car seems to be on its way out, you may want to replace it before prices increase. If you intend to fix your car, remember that vehicle parts are also rising in price, so get repairs done sooner rather than later.
Coffee
About 80% of U.S. unroasted coffee came from Latin America in 2023. But with Latin American nations soon subject to reciprocal tariffs, retirees could start to pay more for their morning cup of joe. Coffee prices have already risen steeply due to political tensions, climate change and other challenges in the past few years. If coffee is something you consume regularly, you may want to stock up on your favorite roast now.
Shelf stable goods
The cost of perishable foods is expected to rise more immediately in the wake of Trump’s new tariffs than the cost of non-perishable items. But loading up on perishables is inherently risky, as not every item freezes as well as you’d think.
If you’re going to pre-stock your kitchen, you may want to focus on staples that include cooking oils, grains, and canned vegetables. You may also want to do more of your shopping at major supermarket chains and big-box stores, since these retailers, due to their size, may be better equipped to absorb cost increases than smaller grocers.
Electronics and cellphones
Electronics aren’t something you buy every day. But if your TV is on the fritz or you’ve been meaning to upgrade to a new smartphone, the time may be now.
Tariff policies are coming down hard on China in particular, which is a major importer of electronics. In 2023, China accounted for 78% of U.S. smartphone imports and 79% of laptop and tablet imports, per the Consumer Technology Association. You may want to do a walk-through at home and figure out which items will need to be replaced in short order.
Trump’s tariff policies are likely to drive up the cost of apparel and footwear, per the American Apparel & Footwear Association, especially since items in these categories already faced a high tariff burden before the more recent policies were introduced. Leather goods may face a whopping 79% increase in prices. It’s a good time to replace worn items or anticipate clothing and footwear needs and stock up, especially on your favorite clothing brands.
Pharmaceuticals
The president announced his intention to add new pharmaceutical tariffs on April 8. This policy contrasts his earlier announcements, in which he exempted the pharmaceutical industry. Countries generally avoid tariffs on drugs or drug supply chains since shortages can cause illness or death. Pharmaceuticals will likely increase in price by about 12.4% in the near term, according to the Yale Budget Lab.
Some pharmaceutical companies have been stockpiling key ingredients, making it difficult to predict which drugs might rise in price and when. According to the Washington Post, drug companies may also absorb the cost of tariffs, though they may pass the cost on to insurers, who could, in turn, raise premiums.
So, while the jury is still out on future pharmaceutical prices, there are a few ways you could prepare for drug tariffs. First, ask your pharmacist if you could order a larger supply of your prescription drugs. Second, you could stock up on generic drugs, such as low-dose aspirin and other over-the-counter medications. Finally, if you rely on an expensive drug or medical device, ask your doctor for advice.
Many of us remember the early days of the pandemic when panic-buying was prevalent. But if you’re retired and on a limited budget, you’ll want to be judicious about how you stock up on goods.
One thing to remember is that supply chains aren’t being threatened as profoundly this time as they were in 2020. And bigger retailers like Walmart and Costco may be surprisingly agile in the face of tariffs, leading to only modest cost increases on everyday goods like groceries and apparel.
Before you go on an apocalypse-style shopping spree, figure out where the money will come from. Given the recent and current market downturn, it’s not a great time to cash out stocks. But if you have assets that haven’t lost value or extra cash on hand, you may want to address a few key needs now before prices increase.
That said, it may not pay to stock up beyond relatively near-term needs. Replace your smartphone if it’s five years old with a limited battery life, but don’t rush to replace a three-year-old laptop that continues to operate satisfactorily.
The reality is that if too many consumers increase their spending in response to tariffs, it could drive inflation up even more and make it very difficult for the Federal Reserve to lower interest rates, which could be a source of relief for retirees and younger consumers alike. And you also don’t want to strain your budget or, worse yet, take on debt now to avoid potentially higher prices down the road.