New Trump Tariffs And TX: What Products Could Cost More Locally?

TEXAS — President Donald Trump this week announced sweeping new tariffs, including a 10 percent tax on imports from all countries and higher tariff rates on dozens more.

Trump, in an announcement Wednesday, said the "reciprocal tariffs" are aimed to promote domestic manufacturing and narrow the gap with the tariffs the White House says other countries unfairly impose on American-made products.

Many Texans are wondering: What products will cost more? The answer — because Trump’s tariffs apply to nearly every import, and U.S. exports are being hit with retaliatory tariffs — is just about everything.

Economists warn that the impact could be especially hard for everyday necessities like food, clothing, and energy.

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And those effects will fall hardest on lower-income households, a new Yale Budget Lab analysis suggests:

Groceries: The average grocery bill in Texas could rise by 1.6 percent from this latest round of tariffs, and 2.8 percent total from all 2025 trade actions. Expect to see higher prices on fresh produce, with an estimated 4 percent increase.

This could hit families shopping at H-E-B, Kroger, Central Market, or local markets this spring and summer.

Clothing: Yale researchers estimate clothing prices could jump 8 percent due to the new tariffs and a whopping 17 percent when all tariffs are factored in.

From the Galleria in Houston to NorthPark Center in Dallas to the San Marcos outlets, back-to-school shopping this fall could be significantly more expensive.

Energy: Although energy tariffs are more indirect, Texas’s diverse but import-dependent energy market means costs could creep up, especially in rural communities already paying more for utilities.

Cars: While Wednesday’s announcement did not include new auto tariffs, earlier trade policies have already driven up new car prices by about 8.4 percent, or roughly $4,000 per vehicle.

That continues to affect car buyers at dealerships from El Paso to Fort Worth to Corpus Christi.

Home Goods and Construction Materials: Lumber, copper, and computer chips are all included in previous or pending tariffs.

That could mean higher prices for home renovations — from kitchen upgrades in Houston suburbs to ranch repairs in the Hill Country.

Reciprocal Tariffs

The reciprocal tariffs, which range from 10 percent to 46 percent, are set to take effect April 9. The average tariff rate the United States charges would increase to roughly 22 percent from 2.5 percent in 2024, according to Olu Sonola, head of U.S. economic research at Fitch Ratings. That’s the highest tariff rate since 1909.

“Many countries will likely end up in a recession,” Sonola told The Associated Press. "You can throw most forecasts out the door if this tariff rate stays on for an extended period of time.”

CNBC has a full list of reciprocal tariffs, including the tariffs other countries charge the United States. If they take effect, U.S. businesses are likely to pass the increased costs onto consumers, sparking fears of a recession or “stagflation,” a combination of high inflation, stagnant economic growth and high unemployment.

Lower-income Americans to take the biggest hit

The Yale Budget Lab study suggests lower-income Americans would take the biggest hit because they spend a greater share of their income.

Specifically, households with an average disposable income of around $43,000, among the lowest in the country, would see their disposable income drop by 2.3 percent with the new tariffs and by 4 percent with all 2025 tariffs included, the Yale study said.

In Texas, where the 2023 median household income was $75,780, that means many middle-class families could see tighter budgets.

The wealthiest Americans — those with $500,000 or more disposable income — would see a decline in disposable income of 0.9 on the new tariffs and 1.6 percent overall, according to the study.

The previously announced tariffs impose 25 percent taxes on auto imports, levies against China, Canada and Mexico and expanded trade penalties on steel and aluminum. Trump has also imposed tariffs on countries that import oil from Venezuela and he plans separate import taxes on pharmaceutical drugs, lumber, copper and computer chips.

What Happens Next?

Trump bypassed Congress by declaring a national emergency, which isn’t reviewable by courts. But Congress can terminate it. Four Republicans — Sens. Lisa Murkowski of Alaska, Susan Collins of Maine, and Rand Paul and former GOP leader Mitch McConnell, both of Kentucky — have joined Democrats in trying to undo the tariffs.

Paul, independent Sen. Angus King of Maine, and five Democrats led by Sen. Tim Kaine of Virginia are co-sponsors of the one-sentence resolution that terminates the emergency declaration.

Wall Street Reacts

Financial markets around the world are reeling Thursday following Trump’s latest and most severe volley of tariffs, and the U.S. stock market may be taking the worst of it.

In early trading Thursday, the S&P 500 was down 3.3 percent, worse than the drops for other major stock markets. The Dow Jones Industrial Average was down 1,160 points, or 2.7 percent, as of 9:32 a.m. Eastern time, and the Nasdaq composite was 4.5 percent lower.

Little was spared as fear flared globally about the potentially toxic mix of higher inflation and weakening economic growth that tariffs can create. Prices fell for everything from crude oil to Big Tech stocks to small companies that invest only in U.S. real estate. Even gold, which has hit records recently as investors sought something safer to own, pulled lower. The value of the U.S. dollar also slid against other currencies, including the euro and Canadian dollar.

If Trump follows through on his tariffs, stock prices may need to fall much more than 10 percent from their all-time high in order to reflect the global recession that could follow, along with the hit to profits that U.S. companies could take because of them.

“Markets may actually be underreacting, especially if these rates turn out to be final, given the potential knock-on effects to global consumption and trade,” Sean Sun, portfolio manager at Thornburg Investment Management, told The Associated Press.

He sees Trump’s announcement on Wednesday as more of an opening move than an endpoint for policy.

The Associated Press contributed reporting.