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Trump’s changing tariffs causes panic buying and paralysis

April 12, 2025
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Natalie Sherman

BBC News

Reporting fromNew York, New York
BBC Richard MedinaBBC

Days after Richard Medina went looking for a smartphone to beat new tariffs, the US announced the devices would be exempt from the duties

When his camera stopped working on his iPhone recently, New Yorker Richard Medina didn’t waste any time. With the threat of tariff-fuelled price hikes on smartphones bearing down, he quickly called his phone company for a new one.

“I said, ‘We’ve got to switch this out now,'” the 43-year-old recalled. “Let’s take care of it.”

The move was a sign of the pressure rising across the US, where households are being buffeted by what could be staggering price rises, and even possible shortages triggered by the sweeping tariffs that US President Donald Trump announced this month.

Some are trying to stock up. Others say they feel paralysed by the changes, which have come quickly, or hope Trump will change his mind and reverse course – not an entirely unreasonable hope given the rapid changes in policy.

Trump, facing financial market revolt over his latest tariffs, has already altered his plans repeatedly.

First, he scaled back duties that had been planned on some countries, such as the European Union, in what was described as a 90-day pause.

Then, as market turmoil continued, he exempted smartphones and other electronics from the duties, announcing the carve-out just a few days after Mr Medina felt pressure to make a purchase.

“I can’t keep up with the president. Every day is something new,” said Anna Woods, 42, who recently received a message from her son’s summer camp warning that the tariffs might affect pricing of standard gear such as T-shirts.

The 42-year-old, who works in legal operations, says she is nervous but unclear how to proceed.

“I just feel like we’re living in uncertain times,” she said, adding: “I do need to make some purchases …. Everything is going up.”

Anna Woods, 42 of Brooklyn and her 9 year old

Anna Woods is worried about summer camp costs for her son

The latest tariffs include a 10% tax on the vast majority of imports – and an eye-popping 145% duty on goods from China, which is the third biggest supplier of imports to the US after the European Union and Mexico and a key source of essentials such as smartphones, shoes and umbrellas.

The measures followed previous orders that added 25% levies on cars, steel, aluminium and some goods from Canada and Mexico.

In all, Trump’s orders have pushed the average effective tariff rate on imports in the US to the highest level in more than a century.

In stores, the immediate impact has been limited, since many firms stockpiled some products in anticipation of some tariffs.

But the tariffs are widely expected to lead to higher prices in the months ahead, especially for items such as clothing, leather goods, electronics and toys, many of which are made in China.

The Budget Lab at Yale forecasts that prices for clothing could soar by more than 60% in the short run; basic pharmaceutical products could jump by 12%, and food prices rise by 2.6%.

All told, the typical US family is facing a roughly $4,700 jump in costs due to the new taxes, if purchase patterns remain the same, it estimates.

Jamie Casey pushes a pram with a rain cover while in the aisles of a Target, the shelves stocked with lamps, storage baskets and plush animals

Jamie Casey is monitoring prices and worried about the future

“I’m extremely worried about it,” said 38-year-old mother Jamie Casey, one of more than a dozen people shopping at a Target in Brooklyn on a recent afternoon who shared their thoughts with the BBC about the tariffs.

She was in the store picking up formula – and some onesies and outfits for her daughter, who has yet to turn one.

“I wouldn’t say I’m panic-buying yet, but I am interested in how it plays out.”

Major retailers experienced a jump in visits in the weeks leading up to Trump’s tariff announcement, according to research firm Placer.ai, while purchases at the likes of Walmart and Target increased markedly in the immediate aftermath, according to data tracked by ConsumerEdge.

There has also been an uptick in US purchases on Amazon’s e-commerce platform, where Chinese sellers dominate, CEO Andy Jassy told CNBC recently.

“I don’t know if we can necessarily conclude it’s panic-buying but there seems to be broad stock-up behaviour,” said Michael Gunther, head of insights at ConsumerEdge, noting that two separate data sets used by the firm showed a pick-up.

The dynamic has added to the tariff turmoil.

Last week, as the measures came into effect, some businesses started introducing tariff surcharges, while others abruptly cancelled shipments from China, unwilling to risk being unable to recoup the cost of the duties.

The disruption has the potential to cause near-term shortages in the US of items where China dominates the supply, such as baby carriages, colouring books and umbrellas, analysts at Macquarie noted this week.

Analysts say the pickup in consumer purchases is likely to prove temporary, or an acceleration of transactions that would have happened anyway.

If price rises start to hit, many economists expect Americans to opt for cheaper substitutes, delay purchases, or simply do without – a pullback with major consequences for an economy driven by consumer spending.

Kathy Bostjancic, chief economist at Nationwide, is predicting the US economy will grow just 0.5% this year, and the unemployment rate will rise to 5% – the highest level since 2021 amid Covid.

Other firms, such as JP Morgan, are forecasting an outright recession.

“In terms of the consumer, it does get a little tricky,” Ms Bostjancic said.

“We could see consumer spending actually be strong in March and April but it’s just because of this surge ahead of the tariff increases,” she added. “Going forward, consumer spending is going to be weaker.”

On surveys, fears about both the economy and price rises are flaring, even though hiring has been solid and inflation cooled to 2.4% in March, down from 2.8% in February.

Some people shopping in New York said it felt like a whole way of life could be coming to an end.

Louis Lopez, an elevator mechanic in New York City, said he was so worried about the economy he had started to squirrel away cash under the mattress. But he was also holding shopping bags with new work clothes and a pair of Nike trainers for the summer.

“You might as well buy it now … while you have it good,” the 56-year-old said. “It’s going to change everything for everybody.”

Cristina Montoya said she had been buying extra canned food and frozen fruit, a little at a time for a few months, anxious about possible price increases, especially as a pensioner reliant on a fixed income.

“You never used to do your shopping nervous,” the 74-year-old said. “I feel like you have to buy a lot of things because you don’t know what’s going to happen.”

Cristina Montoya

Cristina Montoya is on a fixed income and worried over the uncertainty



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