4 things the middle class will probably no longer be able to afford once Trump comes to power
Mohammed Badra/EPA-EFE / Shutterstock / Mohammed Badra/EPA-EFE / Shutterstock
President-elect Donald Trump will take office for the second time on January 20 and major changes are expected as a result of his proposed policies. Although he has promised the country a change in the economy, it may not happen in the way people expect. Instead of more money coming into Americans' pockets, things could become more expensive.
Read more: The Trump Economy Begins: 5 Money Moves the Middle Class Needs to Make Before Inauguration Day
Try This: 4 Unusual Ways to Make Extra Money that Actually Work
Trump has pledged to maintain a 10% tariff on global imports, a 60% tariff on goods from China and, until his conditions are met, a 25% tariff on Canadian and Mexican imports, which he announced on the first day of his presidency. new term and would likely increase the prices of everyday household items.
“The US imports various electronic devices, such as tablets, smartphones and laptops, from China,” says Anna Yen, CFA, at MoneyLion. “The increase in import tariffs could result in a price increase of up to 46% for these items. Therefore, they may become less affordable for the middle class.”
But that's not all. Look for higher prices on appliances such as refrigerators, blenders and dishwashers. “As it is now, these items are expensive enough,” Yen said. “The increase in import tariffs could further push up their prices by about 19%.”
Everyday goods aren't the only thing consumers are likely to pay more for. Here are four things the middle class may no longer be able to afford if Trump returns to the White House.
According to the U.S. Treasury Department, 20.8 million people will have signed up for the Affordable Care Act by 2024, and prices are expected to soar under Trump as he seeks to dismantle parts of the ACA.
“Monthly premiums could skyrocket by 20% to 30% for middle-class families, pre-existing conditions could once again become a barrier to coverage, many employers could cut health benefits to lower costs, and drug prices prescription could increase without price controls. says financial expert Andrew Lokenauth, founder of TheFinanceNewsletter.com.
Americans participating in the ACA will likely see cost changes when a key tax break from the COVID-19 pandemic expires at the end of this year. According to KFF, premiums could double in some states if Trump does not extend the subsidies, cutting costs for millions.
Find out: How President-elect Trump's victory could impact grocery prices
Pursuing a higher education could cost even more under Trump, and Lokenauth says students should brace for costly changes.
“Interest rates on federal student loans could rise, income-driven repayment plans could become more restrictive, funding for public universities could decrease, leading to higher tuition, and student loan forgiveness programs could be eliminated or reduced,” he explained out.
High interest rates are just one of many problems homebuyers have faced in recent years, but the Federal Reserve has cut rates three times in 2024, narrowing the range to 4.25% to 4.5%. In September, the Federal Reserve cut interest rates by half a percentage point for the first time since 2020. In November, the Fed cut rates by another 0.25 and in December by another 0.25.
Another potential win for the market is Trump's promise of more affordable housing, but Lokenauth said homebuyers could still face financial challenges.
“Mortgage rates could rise as a result of economic policies, first-time homebuyer programs could face cuts, property taxes could rise in middle-class neighborhoods and the mortgage interest deduction could be adjusted, affecting affordability,” he explains out.
Trump's policies could make housing out of reach for some.
“President-elect Trump will accelerate deficit growth faster than Vice President Harris would,” Michael Nourmand, president of real estate firm Nourmand & Associates, told CNBC. Furthermore, he stated that Trump's proposed tariff plans could also stimulate inflation and increase prices.
Trump has regularly touted his pricing plans in the run-up to the election, but his policies are likely to increase the price of cars.
“There is no such thing as a 100% American vehicle,” Ivan Drury, director of insights at Edmunds, told CNBC. “There is so much complexity, even though it seems like a simple thing.”
But that's not the only way transportation costs can increase. Lokenauth explained that gas prices could rise due to international trade policies, public transportation funding could decrease and tax breaks for electric vehicles could be eliminated under the Trump administration, which the president denounced during his campaign .
No one can predict what policies Trump will implement once he returns to the White House, but there will be significant changes if his planned tariffs are imposed, and prices are expected to rise.
Editor's Note on Political Coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reporting on politically focused financial stories. For more on this topic, check out 7 Little Luxuries the Middle Class Can Afford When Trump Takes Office.
More from GOBankingRates
This article originally appeared on GOBankingRates.com: 4 Things the Middle Class Likely Can't Afford Once Trump Takes Office
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Strictly Necessary Cookies
Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.
If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.
