Jasmine Li and Rachel Wolfe of The Wall Street Journal are reporting some consumers are snapping up computer parts, vacuum cleaners, coffee, and olive oil before levies take effect. They write:
Tariff-conscious consumers are stockpiling goods and rushing to upgrade old cars and appliances to get ahead of potential price increases.
A quarter of Americans surveyed said it was a good time for major purchases as they expect prices to go up next year, up from 10% a month prior and a record high, according to the University of Michigan’s monthly survey of consumers. And a third of the 2,000 people surveyed recently by CreditCards.com said they were buying more now because they feared tariffs.
Some economists warn that by spending as though inflation is coming, people could already be pushing it higher. The consumer-price index of goods and services grew 2.7% year over year in November, according to the Labor Department, slightly higher than in the prior month. The boost was driven in part by a surge in durable-goods purchases some shoppers said are related to President-elect Donald Trump’s threats of tariffs on imports from countries including Canada, Mexico and China.
“People can make a judgment that, ‘Well I thought I was going to buy a TV in the next 12 months. Maybe I should buy it in the next 12 weeks,’” said Robert Barbera, director of the Center for Financial Economics at Johns Hopkins University. […]
In an effort to boost domestic manufacturing of the devices that power artificial intelligence, the Biden administration said it would double the tariff rate on China’s semiconductors in 2025, to 50% from 25%. With those increases on the way and potential Trump tariff increases on the horizon, Liu decided it was a good time to stock up. She spent over $1,600 on new chips and other computer equipment recently.
The good news, she said, is that one of these chips usually lasts gamers at least a few years.
“If you were to build a new PC now, it should last you until the next election cycle,” she said.
Read more here.
