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During his campaign, President-elect Donald Trump highlighted the burden of high grocery prices on Americans and promised to bring relief to households. This pledge likely played a significant role in his election, but experts warn that his proposed tariffs could actually worsen the problem.
Economic concerns, particularly high prices, were top priorities for most voters. The COVID-19 pandemic, along with global conflicts like the war in Ukraine, led to major supply chain disruptions and inflated prices. By 2024, grocery store prices were almost 25% higher than pre-pandemic levels, according to Consumer Price Index data. An AP VoteCast survey revealed that 6 in 10 voters who were "very concerned" about the economy voted for Trump.
However, experts caution that Trump's signature campaign promise—imposing a 10-20% tariff on all imports, with goods from China facing tariffs as high as 60%—could lead to increased grocery prices for consumers.
"This policy is almost surely going to backfire," says David Ortega, a food economist and professor at Michigan State University. "Instead of bringing prices down, these tariffs are almost guaranteed to lead to an increase in prices."
Trump has stated that he plans to impose tariffs on imported goods and foods to boost American manufacturing and address what he considers unfair trade practices by China. He has asserted that the tariffs will be paid by other countries rather than consumers. "We’re going to be a tariff nation," he said at a campaign rally in Mosinee, Wisconsin, in September. "It’s not going to be at a cost to you, it’s going to be at a cost to another country."
Despite these claims, experts believe that consumers might still feel the impact at the checkout line if Trump's proposed tariffs are implemented.
"The rule of the law is that the tariff is paid at the border by the importer. Now, that does not mean that the true economic burden is necessarily on the importer," says Felix Tintelnot, professor of economics at Duke University. Many importers might raise the cost of items to offset the tariffs, thus passing the burden on to consumers, Tintelnot explains.
An estimate from the Peterson Institute for International Economics found that Trump’s proposed tariffs could cost the average American household $2,600 a year, with lower-income Americans being hit the hardest. Walmart’s CEO recently told CNBC that the chain might have to raise prices on items if the proposed tariffs go into effect.
Groceries most likely to be affected are those that are hard to grow or produce in most regions of the U.S. and need to be imported, such as coffee, bananas, or cocoa.
However, tariffs could also impact the price of items produced in the United States, says Ortega. Many domestic manufacturers rely on "intermediary goods" from other countries—like fertilizer, equipment, and packaging—to produce and manufacture food domestically. "When those products are facing a tariff, that's a tax, it increases the cost of production, and then that cost gets passed down to the consumer in the form of higher prices," he explains.
Additionally, imposing tariffs can provoke other countries to implement retaliatory tariffs. After the first Trump Administration placed a series of tariffs on China in 2018, China retaliated by placing tariffs on soybean imports. The U.S. government compensated for losses with a $28 billion aid package for farmers that relied on taxpayer funding.
Unlike the 2018 tariffs, which focused on a limited number of goods including washing machines, solar panels, and metals like aluminum and steel, the current tariff proposals are far more widespread. This means consumers might feel the burden more than they did in 2018. "We can expect larger price effects this time because many more goods are facing across-the-board tariffs," says Tintelnot.
President-elect Donald Trump has chosen Howard Lutnick, head of brokerage and investment bank Cantor Fitzgerald and cryptocurrency enthusiast, as his nominee for commerce secretary.
The nomination would put Lutnick in charge of a sprawling Cabinet agency that is involved in funding new computer chip factories, imposing trade restrictions, releasing economic data, and monitoring the weather. It is also a position in which connections to CEOs and the wider business community are crucial.
Lutnick, a co-chair of Trump’s transition team, along with Linda McMahon, the former wrestling executive who previously led Trump’s Small Business Administration, once appeared on Trump’s NBC reality show, “The Apprentice.” He has become a part of the president-elect’s inner circle.
Here are things to know about the billionaire who, if confirmed by the Senate, will lead the Commerce Department.
He was Elon Musk’s pick to lead the Treasury Department
Elon Musk and others in Trump’s orbit called on Trump last week to dump the previous front-runner for treasury secretary, Scott Bessent, in favor of Lutnick. Musk said in a post that “Bessent is a business-as-usual choice, whereas @howardlutnick will actually enact change.”
The treasury role has been at the center of an unusual high-profile jockeying within the Trump world. At the same time, the position is closely watched in financial circles, where a disruptive nominee could have immediate negative consequences on the stock market, which Trump watches closely. Trump has yet to decide on one of the top remaining vacancies in his proposed cabinet.
The major remaining nominees for the role are Bessent, former Federal Reserve board governor Kevin Warsh, Apollo Global Management Chief Executive Marc Rowan, and Tennessee Sen. Bill Hagerty, Trump’s former Japan ambassador.
He is a major supporter of Trump’s tariff plan
Trump on the campaign trail proposed a 60% tariff on goods from China — and a tariff of up to 20% on everything else the United States imports. On the campaign trail, Trump portrayed the taxes on imports as both a negotiating tool to hammer out better trade terms and as a way to generate revenue to fund tax cuts elsewhere.
An advocate for imposing wide-ranging tariffs, Lutnick gave full-throated support for Trump’s tariffs plan in a CNBC interview in September. “Tariffs are an amazing tool for the president to use — we need to protect the American worker,” he said.
Mainstream economists are generally skeptical of tariffs, considering them a mostly inefficient way for governments to raise money and promote prosperity.
His brother and hundreds of Cantor employees were killed in the September 11th terrorist attacks
Lutnick’s brother, Gary Lutnick, and 658 of 960 Cantor Fitzgerald employees were killed in the Sept. 11, 2001, attack on the World Trade Center. The firm lost two-thirds of its employees that day. Lutnick is a member of the Board of Directors of the National September 11 Memorial & Museum, the Partnership for New York City.
After Cantor Fitzgerald settled a wrongful death and personal injuries case against American Airlines and insurance carriers in 2013 for $135 million, Lutnick said: “We could never, and will never, consider it ordinary. For us, there is no way to describe this compromise with inapt words like ordinary, fair, or reasonable. All we can say is that the legal formality of this matter is over.”
Trump’s Tuesday announcement on the Commerce Department nomination mentioned Lutnick’s loss — stating he was “the embodiment of resilience in the face of unspeakable tragedy.”
He’s a major supporter of cryptocurrency
Lutnick is a proponent of advancing the aims of the cryptocurrency industry — namely, the cryptocurrency Tether.
Cryptocurrencies are forms of digital money that can be traded over the Internet without relying on the global banking system. Bitcoin is the most popular cryptocurrency.
“Bitcoin is like gold and should be free trade everywhere in the world,” Lutnick said at a Bitcoin conference earlier this year. “And as the largest wholesaler in the world, we’re going to do everything in our power to make it so. Bitcoin should trade the same as gold everywhere in the world without exception and without limitation.”
Trump has taken on a favorable view of cryptocurrencies — from announcing in May that the campaign would begin accepting donations in cryptocurrency as part of an effort to build what it calls a “crypto army” leading up to Election Day. He also launched a cryptocurrency platform called World Liberty Financial with members of his family earlier this year.
Voters in California have rejected a ballot measure that would have raised the state minimum wage to $18 per hour by 2026, the highest in the country.
Opponents, including the California Chamber of Commerce, said it would have increased costs, led to higher taxes, and pushed businesses to cut jobs.
“With the economy and costs top of mind for many voters this election, that message appears to have resonated,” said Jennifer Barrera, the chamber’s president and CEO.
Proponents estimated that the measure would have benefited 2 million workers, including hotel and grocery employees.
“Proposition 32’s failure to pass is disappointing for all Californians who believe that everyone who works should earn enough to support their families,” said Kathy Finn, president of UFCW 770, a Southern California union representing nearly 30,000 workers in various sectors.
The current minimum wage rates are $16 per hour for most workers and $20 in the fast-food sector. The healthcare sector will eventually see its minimum wage reach $25 per hour under a law that Democratic Gov. Gavin Newsom signed last year and took effect in October.
Hawaii passed a law in 2022 to gradually increase the statewide minimum wage to $18 an hour, but it does not take effect until 2028.
In 2016, California became the first state to pass a $15 hourly minimum wage under a law signed by then-Gov. Jerry Brown is also a Democrat. About 40 cities and counties already have minimum wages higher than the statewide rate, and six of them require minimums above $18 per hour as of this year.