President Donald Trump vowed to “make America affordable again” before a joint session of Congress Tuesday, but also noted that his steep new tariffs may cause some “disturbance.”
Tariffs on Canada and Mexico took effect the same day, and economists say the taxes are bound to raise prices for consumers — which is already fueling concern among households.
Taken together, Trump’s tariffs on Canada, China and Mexico would cost the typical household more than $1,200 a year, according to a recent analysis by The Peterson Institute for International Economics. (That tally does not account for Trump’s order on Tuesday doubling the 10% tariff on Chinese imports.)
“As long as these tariffs are in place, Americans will be forced to pay higher prices on household goods,” David French, the National Retail Federation’s executive vice president of government relations, said in a statement.
To that end, the federal government plans to appoint an “affordability czar,” as well as create an affordability council, to address high prices in the U.S., Treasury Secretary Scott Bessent said Sunday on “Face the Nation with Margaret Brennan.”
“We are laser focused on this,” Bessent said.
More from Personal Finance:
Americans are suffering from ‘sticker shock’
Canada, Mexico tariffs create ‘ripple effects’ on consumer prices
As tariffs ramp up, this investment can protect against inflation
According to Bessent, the “affordability czar” will pick “five or eight areas where this administration can make a big difference for working class Americans.”
Among the likely contenders could be housing, car prices, groceries, electronics and appliances, all of which have notched significant price jumps in the last five years, data shows.
Higher prices weigh heavily on consumers
Even though inflation has eased in recent months, price increases have not moderated as much as the Federal Reserve has hoped. High costs for food and housing, especially, continue to stretch consumer budgets.
The Conference Board’s consumer confidence index sank in February — notching the largest monthly drop since August 2021 — as worries brewed about tariffs and rising inflation. The University of Michigan’s consumer sentiment index similarly found that Americans largely fear that inflation will flare up again.
“Weak consumer perceptions and uncertainty from the lack of clarity regarding future government policies and regulations can significantly hinder business operations,” said Jack Kleinhenz, chief economist at the National Retail Federation. “That, in turn, can cause a hesitation in consumer spending and make it difficult for companies to make investment and hiring decisions.”
How to hack monthly costs
To safeguard affordability, there are steps consumers can take even amid the escalating trade war and increased inflationary fears.
Consumer savings expert Andrea Woroch recommends “hacking waste from your monthly bills.”
Start with recurring expenses, she advised. Among her top strategies:
- Negotiating rates with current providers by leveraging competitor deals or asking for promos.
- Canceling unused subscriptions or slashing extra services in your current plans, such as “premium movie channels you don’t watch, or get rid of that extra cable box in the guest room,” she said.
- Also, “bundle insurance policies or increase your insurance deductible for up to 20% savings on monthly premiums and get in the habit of unplugging unused gadgets for up to 10% savings on energy,” she said.
People shop for groceries in Monterey Park, California, on February 12, 2025.
Frederic J. Brown | Afp | Getty Images
Cutting back at the grocery store is another big opportunity to reduce your monthly expenses, Woroch said. “Start meal planning and don’t make it overly complicated.”
Woroch also advises looking for recipes that use similar ingredients to ensure all food purchases get consumed in a typical week.
“The less you waste, the less you will spend on groceries,” she said.
“I’d also suggest doing meal planning in reverse — this is when you create a meal plan based on what your grocery store has on sale,” she said. Then stick with your list when shopping.
Further, cook in bulk and freeze single serving leftovers so you have something on hand to reheat to avoid pricey take-out orders.
Finally, put those purchases on a credit card that gives cash back across your major spending categories, such as groceries, gas or utilities.
“This covers most people’s top spending areas, and you can rake in a lot of free money,” Woroch said.
Subscribe to CNBC on YouTube.
