4 things middle class may struggle to afford under Trump’s second term
Trump plans to impose steep tariffs on global imports: a 10% tariff across the board, a 60% tariff on Chinese goods, and a 25% tariff on imports from Canada and Mexico. These tariffs, set to take effect on his first day in office, are expected to drive up prices on everyday household items.
"The U.S. imports various electronic devices from China, such as tablets, smartphones, and laptops," said Anna Yen, CFA, with MoneyLion. "A 60% tariff could mean a price increase of up to 46% for these items, making them far less affordable for middle-class families."
Appliances like refrigerators, blenders, and dishwashers will also see higher prices. "These items are already expensive enough," Yen added. "The new tariffs could push prices up by around 19%."
Four Areas the Middle Class Could Be Hit Hardest
Healthcare Costs
The Affordable Care Act (ACA) currently supports over 20 million Americans and could face significant changes under Trump's administration. His plans to dismantle parts of the ACA could lead to:
- Monthly premiums are rising by 20%-30%.
- Pre-existing conditions become a barrier to coverage.
- Employers reducing health benefits.
- Prescription drug prices are increasing without price controls.
Additionally, the expiration of COVID-era subsidies could double premiums in some states if not renewed. This would place added financial strain on families dependent on ACA coverage.
Higher Education Costs
Trump's policies could make higher education even more expensive for students. According to finance expert Andrew Lokenauth, potential changes include:
- Increased federal student loan interest rates.
- More restrictive income-driven repayment plans.
- Reduced public university funding, leading to higher tuition.
- Elimination or reduction of student loan forgiveness programs.
"Students and families should start preparing for costly changes in the education sector," Lokenauth warned.
Housing Affordability
While Trump has promised more affordable housing, his policies could still create financial challenges for homebuyers:
- Mortgage rates may climb due to economic policies.
- First-time homebuyer programs could face cuts.
- Property taxes might rise in middle-class neighborhoods.
- Changes to the mortgage interest deduction could affect affordability.
"Trump's tariff plans and economic policies could accelerate inflation, making housing unattainable for some middle-class families," said Michael Nourmand, president of Nourmand & Associates.
Transportation Costs
Trump's tariff policies are likely to increase the cost of cars. "There's no such thing as a 100% American vehicle," said Ivan Drury, director of insights at Edmunds. "Global supply chains make it inevitable that car prices will rise under these tariffs."
- Other transportation-related costs could also increase:
- Higher gas prices due to international trade policies.
- Reduced public transportation funding.
- Potential elimination of electric vehicle tax credits.
Nobody knows exactly how Trump's policies will unfold, but if his proposed tariffs and economic changes are enacted, the middle class will likely face higher expenses in key areas. Significant financial challenges may lie ahead, from healthcare to housing and transportation to everyday goods.
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