Consumer spending: One in five Americans reported making more purchases than usual due to concerns over tariffs that President Donald Trump may impose, according to a report by CreditCards.com released on Tuesday. This reflects heightened consumer anxiety over potential price increases and economic uncertainty.
Tariffs are generally inflationary because they raise the cost of imported goods, forcing businesses to either absorb the extra costs or pass them on to consumers through higher prices. This uncertainty has led to a surge in demand for household staples, electronics, and imported goods.
This has an impact in Latino households, which tend to spend a higher percentage of their income on essential goods, are disproportionately affected by rising prices caused by tariffs. Many Latino-owned businesses, especially in retail and food distribution, rely on imports from countries like Mexico and China. If tariffs increase costs, these businesses may struggle to remain competitive.
Moreover, the Latino workforce, which is heavily represented in industries such as agriculture, construction, and manufacturing, may face job instability if companies relocate production or cut costs in response to trade policy shifts.
U.S. imports from China surged at the end of last year as companies stockpiled shipments of clothing, toys, furniture, and electronics ahead of Trump’s proposed tariffs, which could reignite trade tensions.
For Latino consumers, this means that essential goods could become more expensive, impacting their ability to save and invest in their futures. According to the report, 22% of respondents said tariffs had a significant impact on their major purchases, while 30% reported some effect.
Wall Street is concerned that tariffs could accelerate U.S. inflation; prevent the Federal Reserve from lowering interest rates, and slow economic growth. Trade policy uncertainty is also affecting consumer confidence.
One in five Americans classified their recent spending as ‘catastrophic expenses,’ while 23% expect to go deeper into credit card debt this year. This financial strain disproportionately impacts Latino families, who already face systemic barriers to wealth accumulation and access to affordable credit.
Business Challenges and Future Outlook
Executives have voiced concerns about the unpredictable nature of Trump’s tariff plans, which could disrupt global trade and force companies to shift production to the U.S. While this could create domestic jobs, it may also lead to higher operational costs, impacting small and minority-owned businesses.
As the trade landscape continues to evolve, Latino consumers and business owners must navigate the economic challenges posed by tariffs. Policymakers must consider how these trade policies impact vulnerable communities and address potential disparities to ensure economic stability.
