How the Trump tariff proposal may impact your budget

Trump Proposes 20% Tax On Mexican Imports

BUFFALO, N.Y. -- In order to pay for the wall, the Trump administration has proposed a 20-percent tax on goods imported from Mexico.

The cost of the wall is anywhere from $12 billion to $15 billion, and the Trump administration says the tariff could bring in $10 billion a year.

Fred Floss is the Chair of the Department of Economics and Finance at SUNY Buffalo State. He says a lot of what we buy right now in the winter from Mexico are fruits, vegetables, chocolates, and flowers. He says the most immediate thing that could happen is that this would probably make Valentine's Day a lot more expensive.

But Floss says the U.S. is mainly importing auto manufacturing parts and small engines from Mexico. He says the small motors are used in everything from fans to air conditioners.

"So anything that has a little small engine in it, will start to cost more because we're going to put a 20-percent tariff, if at least that's what the discussion is today. So in other words, we're going to pay for the wall," says Floss. "The scary thing is that a lot of those motors go into things Americans make. So if all of the sudden it gets to be more expensive to make goods in the United States, then we're going to start to see layoffs because our goods aren't going to sell."

Floss says the problem is that the market is not going to wait to react, so if you sell roses you might raises your prices now to try to anticipate the tariff being added in the future.

As for how this could affect you, we found a dozen roses selling for $44.99 at 1-800-Flowers.com. If the company was forced to pay a 20-percent tariff, and that cost was passed onto the consumer, that would add $8.99 to the price.

Professor Floss says companies could end up boosting prices even higher to make a bigger profit then just blame it on the tariff.

© 2017 WGRZ-TV


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