Apr 16, 2025
While global tensions rise and billion-dollar trade battles make headlines, Brianna from Washington, D.C., had a straightforward question for hosts of The Ramsey Show in a clip posted Feb. 24: "Can you explain how President Trump’s new executive order on tariffs will affect me on a personal level?”
As of April 10, the Trump administration has imposed a baseline 10% tariff has been placed on imported goods from most countries, along with a 25% tariff on steel and aluminum products, a 25% tariff on foreign-made cars and auto parts, and a minimum 145% tariff on a number of Chinese goods. There also may be more to come, as Trump put a 90-day pause on previously announced reciprocal tariffs.
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All of this activity has left many ordinary families wondering what it means for their household budget.
Dave Ramsey and co-host Ken Coleman set clear expectations on tariffs: higher costs for everyone.
Supercharging the cost of living
Economists and financial experts broadly agree that the costs of trade barriers and import taxes are eventually passed along to consumers.
"There's no question that's how tariffs work," Coleman said while explaining that U.S. companies are ones paying tariffs imposed by the government for goods they import. "I've never seen companies not pass on increased costs to customers."
Ramsey agreed with Coleman's assessment.
“You will pay more, no question about it, 100%," Ramsey said. "Companies do not eat taxes.”
These concerns were also raised last year in a letter signed by 23 Nobel Prize-winning economists warning that Trump’s planned trade tactics would be inflationary.
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For many Americans, these added costs come at a time when they’re already struggling with high living costs. Nevertheless, Coleman was optimistic about what comes next.
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Reasons for optimism
Despite increased costs as a result of tariffs, Coleman argues that American families and corporations are also looking forward to good news on the tax front. The Tax Cuts and Jobs Act (TCJA) of 2017 is set to expire on Dec. 31, 2025, but President Trump and Congress are considering extending the program.
“If the president also extends his tax cuts, which will expire later this year, that would help the American consumer in lowering your costs," he said. "You keep more of your paycheck.”
Although the tax cuts could mitigate the effects of tariffs, some experts argue the TCJA would do more to benefit high-income families than those with lower incomes.
One hopeful scenario is that Trump might either wrap up the trade war swiftly or provide much-needed exemptions and relief for critical products.
Either way, consumers should brace themselves for higher costs and more uncertainty in the months ahead. If you’re worried about your household budget, consider bolstering your savings and look for domestic alternatives for essential products.
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
