HOUSTON – The Supreme Court struck down much of President Donald Trump’s sweeping global tariffs on Friday, a decision which could have ripple effects on economies around the globe.
To better answer what this could mean for everyday Houstonians, KPRC 2 spoke with Stephen Kates, a Bank Rate Financial Analyst, to answer many of your questions that you have asked about what this means.
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Question: Which tariffs were struck down by the Supreme Court, and which tariffs remain in place?
Answer: “So about 60% of the tariffs are being impacted by the Supreme Court ruling, which amounts to $175 to about $200 billion in revenue impact. That would potentially reduce our overall tariff rate for imports coming into the country from about 12% down to six or 7%. So it is a relatively large impact and would be a reduction in the costs that businesses are paying to import goods.”
Question: Can you give an example of goods affected by the tariffs?
Answer: “I mean, nearly everything that we import was impacted in some fashion. What’s going to change here, we’ve shifted some of our trade relationships, China being one of the major ones that we’ve had in the past and has been reduced. As of, I think in December, we import more from Taiwan than we do from China for the first time in decades. Semiconductors and other things like that, some of those essential national security. Imports have been largely exempted to try to fuel AI, but steel, aluminum, parts of any kind, food, timber, goods, materials, just about anything you can name. Very few things are not going to be impacted in some way, but whether those cost savings actually flow to consumers, that’s hard to predict and I’m relatively skeptical, to be honest with you.”
Question: How could this ruling affect grocery prices?
Answer: “I’d say that we’re probably more likely to see less future price increases than we would be to see price drops. Now, there might be some creative sales here coming down the pike where grocery stores or other stores, especially small businesses, try to build up some demand through tariff sales and try to increase the market share. But largely, especially for grocery stores, their margins are paper-thin. And so, if consumers are buying products as of today, given the prices that they are, they’re probably going to be willing to change them.”
Question: What about online shopping and shipping prices?
Answer: “I think the story is going to be relatively similar. For now, given how uncertain things are going to be about whether these tariffs are going to be replaced and how much of it is going to be replaced and what that means, you know, in three months, six months for businesses, I think they’re more likely to default to no action whatsoever. Again, at the margins there could be certain items that are on sale or reduced in price, but overall, this is more likely a boost.
Question: What if I bought a car? Could I get a rebate?
Answer: “Assuming that rebates happen, and in whatever condition that that happens in, I don’t think that that’s going to flow to consumers. I think that’s going to be such a briar patch for consumers who bought in the past to get a rebate for something they already bought. Is that gonna flow into lower cost cars for the next consumer? Maybe. I don’t know, I don’t have a lot of confidence that that’s going to come back to the millions of people who bought such disparate goods across the country from all these different businesses. It’s going to be hard enough for the government to figure out how to refund money to corporations, if that ends up being the ruling. Corporations are certainly going to be pursuing that aggressively, but how that actually gets to them is probably not going be a cash check. It might be in the form of reduced taxes or some other credit or some other way.”
Question: Are there certain purchases consumers may want to wait on now that some tariffs have been struck down?
Answer: “Well, I always like to say, for big purchases, the best time to buy is when you can afford it. And waiting and wondering is going be really hard. New cars, homes, those kinds of big purchases that you’ve already been thinking about and planning for, for months, if not years, waiting around to see what happens with tariffs with such an unknown timeline and effect, I don’t think makes sense. If last month, you were planning to buy a car in February or March, you should probably go ahead and do it, because waiting to see what happens in April, May, June, July, you might be waiting to buy that new car for another year. We don’t know how long it’s going to take for additional litigation to go through lower courts on refunds, for the new tariffs that we talked about, these new Section 122 or 301 tariffs, to readjust and ultimately settle to whatever the new level is going to be. And we’re going to have a lot of unknowns until then. Businesses are trying to figure this out right now, I can promise you that. But we don’t have a lot of answers as to exactly how this is going to come down. If you’ve got some discretionary purchase that you don’t need today, don’t need tomorrow, but want to have at some point and think you can save some money on it. Well then, yeah, I think waiting could make sense, because you probably could save a little bit of money, but it’s hard to know what that’s going to be on an individual basis. If somebody is going to make a large discretionary purchase, like, I don’t know, a jet ski, maybe wait till the summer.”