How Reciprocal Tariffs Affect Your Finances

I guess it’s official: a global trade war has begun thanks to reciprocal tariffs by President Donald J. Trump.

Known as the “Reciprocal Trade and Tariffs Memorandum,” President Trump intends to issue a tax, although the White House calls it a tariff to disguise that reality, that will tax every country the United States does business with.

What Are Reciprocal Tariffs and How Do They Work?

Reciprocal tariffs can be described easily: tit for tat. So if one country charges a tariff of 5%, the U.S. will also charge 5%. This, of course, came after President Trump issued a 25% tariff on steel and aluminum products. Per the New York Times, now President Trump is also proposing a tariff on the auto industry.

I’ve posted on social media that I was thinking of getting a carport for my travel trailer, but if I do, it would cost me substantially more because of the Trump tariffs. In my case, it would increase my carport cost by $2,485. You can see that post here.

Now imagine how else I could use those $2,485 if not for the Trump tariff? I could use that money to pay down my credit card debt, max out my IRA contributions, or simply have fun. Take a nice trip. Of course, I prefer camping now that I have my travel trailer back!

• My Travel Trailer Should Have Been a Total Loss! What I Did Wrong.

Be Prepared Financially!

Over the last few months, I have been saying that chaos creates political instability, which creates financial instability. This means we need to be prepared for what a Trump economy might bring us. This is why I have asked in prior posts if you are a liberal prepper. But apparently, I’m not alone with the chaos of the Trump administration. Ford CEO Jim Farley has also referenced the chaos that President Trump is causing in the auto industry.

• Are You a Liberal Prepper? Apparently, I am.

Now, whether you are a liberal prepper or a conservative, whether politically or fiscally, preparation is the key. Yes, some people have been purchasing products in advance of President Trump’s inauguration to avoid any tax. I’ve argued it depends on your financial situation.

If inflation and taxes or tariffs increase our monthly spending, maybe we should hold back. That’s one reason I was upset with my wife’s car being totaled due to Hurricane Helene, because it meant getting into more debt.

I figure what is the worst-case scenario if in a Trump presidency, the economy flourishes and we don’t have our expenses increase or debt? Then we simply have more money saved up, which is never a bad thing. But to be honest, I’m not the only one saying there may be tough times ahead financially. Actually, even President Trump said prices would likely go up, but he was referencing in the short term.

I don’t like prices going up, whether short-term or not. So my question is, define “short term?” Since we don’t know the answer, then be prepared financially!

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• Bankruptcy
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