The invisible costs of tariffs
THE INVISIBLE COSTS SERIES RETURNS
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Welcome to another installment of our series, The Invisible Costs, where we investigate expenses that slip under the radar. To fill in our new subscribers, we’ve tackled the sneaky costs involved in childcare, travel, and more. This time, we’re shifting gears to something that feels a little less like a “double edged sword” and honestly just sucks for most Americans right now: tariffs. Unless you’re living in a bunker, you know that President Trump has imposed new tariffs on imported products from the three largest trading partners with the United States. There are rumblings he’s planning to walk them back, but they’re still in effect at our time of publication. In any case, we can assume this is an issue we’ll be confronting for a while.
Grocery prices are the most obvious place we’ll feel the impact of tariffs. Put aside the bird flu egg situation for a minute (we can’t only handle one catastrophe at a time). If you’re like us and buying groceries every week, rising prices for avocados, tomatoes, and maple syrup are impossible to miss. With Trump’s tariffs kicking in—25% on Canada and Mexico, and 20% on China (increased from 10%)—you’ll feel the difference in the checkout line, as the U.S. Department of Agriculture notes that Mexico supplies nearly two-thirds of our vegetable imports. Insert your avocado toast joke here, but ugh.
Naturally, Heather and I talk money a lot—it’s what we do for a living and what keeps us our moving towards our financial goals. Tariffs, though? They’re a new player. I’m not here to debate trade policy (I’ll leave that to the economists), but I will say these hidden costs are real and will reshape how Americans live in ways we didn’t necessarily sign up for and don’t necessarily see coming. So, let’s unpack some invisible costs of Trump’s tariffs and their impact on us, citing the latest data and a bit of personal reflection.
Higher utility bills. Canada’s a big energy supplier—think crude oil and natural gas. The Tax Foundation estimates that even just a 10% tariff on Canadian energy could bump up gas prices in the Midwest, but they won’t just feel it at the pump. TIME reports that refineries can’t pivot quickly to other oil sources, meaning higher costs get passed to electric bills, too. Love staying cozy? That’s going to cost you a few extra bucks each month.
Shrinking disposable income. The Peterson Institute for International Economics pegs the income hit at $1,700 annually for a middle-income household due to these tariffs. Personally, when I think of how we use our disposable income, that would mean: less dinners out, date nights, ice cream scoops on the weekends, and movie tickets. After a long work week, we really lean on these little joys with our family, and it sucks to think about the squeeze being put on them.
Home construction delays. Lumber from Canada comprises more than 70% of our softwood imports, according to the National Association of Home Builders. These imports now face a 25% tariff on top of an already existing 14.5% tax. Thinking of building that dream home for your family? Well, costs are up $3-4 billion industry-wide, per NAHB, stretching timelines and budgets. As if affording a home in America wasn’t hard enough.
Appliance price creep. Steel and aluminum are set to be tariffed at 25% as of March 12, per the BBC. This means your next fridge or dish washer is going to cost more. Forbes notes that 2018 tariffs jacked up appliance prices by $86-$92 per unit. Maintenance is one thing, but replacing them? That’s a hidden hit to your savings.
Job uncertainty in manufacturing. Trump says tariffs protect jobs, but a 2020 Federal Reserve study found 2018 tariffs cut manufacturing employment due to higher input costs and retaliation. For Americans who make their living in the manufacturing sector, job stability is a lot shakier when factories feel the pinch.
Auto repair sticker shock. Crisscrossing North American borders are millions of auto parts. A 25% tariff on Canada and Mexico will certainty compound these costs. To give you an idea of the impact, the auto industry represent $228 billion in trade flow, per Americas Quarterly. Now, oil changes and flat tires will cut into your budget even more.
A chill on investments. Businesses hate uncertainty. PBS News notes that tariffs disrupt supply chains, which slows appetites for institutional investing. Fewer growth expansions mean fewer jobs and fewer raises for Americans, which means less money for your nest egg, and less money for you to put back into the economy and the markets, and round and round we go.
The ripple effects of retaliatory tariffs. According to Bloomberg, Canada’s $107 billion in retaliatory tariffs and Mexico’s hinted response will hit U.S. exports like meat and oil. Farmers and energy workers will feel it first, but then it will trickle to the average household via higher prices and lost income. This is just another way household budgets take a quiet blow.
Inflation’s silent climb. Capital Economics predicts U.S. inflation could jump from 2.9% to 4% depending on what mix of tariffs take effect. Again, it’s not just groceries; it’s everything from clothing, to gas, to rent, you name it. The Center for American Progress warns this erodes purchasing power, making every dollar stretch even less.
Tariffs aren’t just numbers on a ledger or the latest buzz word in the media. They’re personal. They’re that extra stress when you’re paying the bills or canceling your personal plans. They become the “maybe next year” for big purchases. Americans have weathered financial ups and downs in the past, but this is going to feel like a slow leak that can’t be plugged.
But I want to be clear: The American Dream isn’t dead because of tariffs. Navigating this new economic environment is about awareness and adaptation. Shopping with more intention can have a dramatic impact on your spending. Local goods, for example, might dodge some price hikes and put some dollars back in your pocket, but it won’t fix all of this. You might have to make changes, or shift your priorities, or revisit your time horizons for certain goals. Above all else, make sure you communicate with your partner about what you’re spending on, and how you’re feeling about it. Fights over money kill more relationships than spoiled avocados—even the expensive ones.
Are you concerned about how tariffs will impact you? Do you have any other love and money questions you’d like answered in a future issue of The Joint Account? Let us know what’s on your mind.
Heather painted these custom Nike sneakers as a belated holiday gift for my hair stylist Pete, who has become a close friend of ours over the years. He also owns Terrace, a local plant shop born from his family’s story of loss, healing, and growth. Heather is big on giving gifts with meaning—she says, they show someone you care much more than assigning a certain dollar amount to an empty gesture. Gifts that are personal are priceless.
TJA in The New York Times!!!
What a *pinch me* moment.
In last Sunday’s edition of The New York Times, I shared my thoughts in a feature about how little some couples actually know about each other’s finances (it’s kind of wild), and why the means and methods of communicating with your partner around money are so important. This very ‘Newsletter That Could’ received a shoutout, and we couldn’t be more grateful to Diane Harris for including us.
*Btw, hello to all our new subscribers that found us through the article. We’ve got almost two years’ worth of archives for you to dig through, if you’re interested!*
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The content shared in The Joint Account does not constitute financial, legal, or any other professional advice. Readers should consult with their respective professionals for specific advice tailored to their situation.
Those handpainted shoes are great! What a thoughtful gift.