Toy Prices Rise 56%... "Trump Tariffs Increase Household Costs by Over 10 Million Won"

Coat 140,000 → 170,000 KRW, Refrigerator 940,000 → 1,200,000 KRW
"US product prices will also rise due to tariff adjustments"

An analysis has emerged indicating that if U.S. President Donald Trump's tariff policies are implemented, prices of toys could rise by up to 56%, and home appliance prices by 31%, leading to widespread price increases in everyday goods.

On the 14th (local time), according to the National Retail Federation (NRF), Yahoo Finance reported that tariffs are expected to reduce American consumers' purchasing power by $46 billion to $78 billion across six sectors: clothing, toys, furniture, home appliances, footwear, and travel products.

AFP Yonhap News

President-elect Trump has announced plans to impose universal tariffs of 10-20% on all imports and tariffs of 60-100% on imports from China. Yahoo Finance stated, "With imports accounting for more than 15% of the U.S. Gross Domestic Product (GDP), any 'universal' tariff policy will have widespread effects on everyday consumer goods."

The NRF anticipates price increases of ▲12.5-20.6% for clothing ▲36.3-55.8% for toys ▲6.4-9.5% for furniture ▲19.4-31% for home appliances ▲18.1-28.8% for footwear ▲13-21.5% for travel products.

In particular, toys are expected to see steep price increases since domestically produced toys account for less than 1% of the total market.

Low-income American households spend three times more of their income on clothing purchases than high-income households, so clothing price increases will hit low-income families hard. According to this forecast, an $80 (approximately 112,500 KRW) pair of jeans could rise by up to $16 (approximately 22,500 KRW), and a $100 (approximately 140,500 KRW) coat could increase by up to $21 (approximately 29,500 KRW). The average price of a basic refrigerator, $665 (approximately 935,000 KRW), could reach up to $852 (approximately 1,197,900 KRW).

Karen Karniol-Tambur, Co-Chief Investment Officer (CIO) at Bridgewater Associates, predicted, "This is a larger tariff than in 2016, so the impact will be much greater."

Kimberly Clausing, a researcher at the Peterson Institute for International Economics (PIIE), estimated that the cost of Trump's tariffs, excluding additional costs from retaliatory tariffs and reduced competitiveness, would amount to at least 1.8% of GDP. She also stated that the impact of these cost increases would be about five times greater than when tariffs were imposed during the first term of the Trump administration.

Karniol-Tambur, CIO, said, "Simply put, Trump's tariffs could translate into 50 basis points (1bp = 0.01 percentage points) of inflation," adding, "It was not a big issue in the 2016 environment, but it is a bigger problem in today's environment."

Major think tanks have also presented research results predicting price increases. The PIIE estimated that the additional cost per U.S. household would be $2,600 annually (approximately 3.66 million KRW). The Yale Budget Research Institute projected that considering retaliatory tariffs from other countries, the impact could reach up to $7,600 (approximately 10.69 million KRW) per household.

Furthermore, there are concerns that if tariffs are reflected in import prices, U.S. manufacturers may also raise prices accordingly, leading to an overall increase in product prices. Researcher Clausing stated, "There is no expectation that domestic goods will remain cheaper after tariffs. Prices always rise along with tariff prices," and hypothesized, "If French wine becomes more expensive, California (wine makers) can also price their products higher."