How the Next 4 Years Will Look for Shopping
Economic policies have a direct impact on you—one larger than anyone would expect. When the economy goes into a recession, consumers tend to buy less, but when the economy is in a period of expansion, consumer spending increases. Consumer spending is the amount of money a household spends on final goods and services. This is due to the fact that in a recession, people tend to save more, but the opposite happens in an expansion. This directly relates to the prices of things you buy, something especially apparent in the fashion industry.
Kamala Harris, the Democratic incumbent candidate in the 2024 presidential election, proposed similar economic policies as the Biden administration. She focused a lot on not wanting to raise taxes for people below an annual income of 400,000 USD and small businesses, but to make up for that loss she would increase taxes on corporations and wealthier citizens. Additionally, she wanted to make housing more affordable and available to the public. She also wanted to lower the cost of medicine and groceries, capping insulin prices.
Donald Trump, the winner of the 2024 presidential election, proposes greater tax cuts for businesses, increasing tariffs, and foreign investment changes. The tax cuts Trump proposes will lower taxes, however, they will also increase the federal deficit. Trump’s plan to increase tariffs align with his belief that America should be more self-reliant, as it will decrease the amount of imports America receives. However, this could lead to increases in inflation and the cost of goods. Another major point Trump makes is limiting foreign investment, especially between China and the US, to reduce the influence China has on the US economy. Kamala’s policies were similar to the ones set up during Biden’s presidency. She was not going to raise taxes for people below a certain income and small businesses, but to make up for that loss she would increase taxes on corporations and wealthier citizens.
Tax cuts - Trump's plan to reduce taxes on everyone (Politifact). He has been vague about how much he specifically plans to decrease it by, but it could end up adding trillions to the federal deficit (CRFB)
While one may think that consumer spending might decrease due to an increase in inflation and the cost of goods (Infometrics), it might not change that much, because the new tax cuts mean that more money is available for households to spend (FRBNY).
Increase tariffs - Trump plans to increase tariffs on foreign goods by 10%, and for goods imported from China, by 60%
This will increase the cost of goods, as companies will need to increase taxes in order to retain their profits. It will also force companies to move their supply chains out of China to avoid the increased tariffs there, which will also drive up prices (investopedia).
Limits on foreign investment - limiting investment between China and the U.S., making the U.S. more self reliant (Politifact).
Will also reduce the amount of goods imported from China, and because those tend to be relatively cheaper (ex. Shein, Edikted, etc.), prices will also increase.
As a teenager who tends to shop at stores like Brandy Melville and Edikted,
Trump’s policies are predicted to raise inflation, but due to the tax cuts, consumer spending might not be that affected. His policies are also expected to drive up the short-term CPI. Kamala’s policies were expected to have mixed impacts on both CPI and inflation, as some parts of her plan would’ve helped moderate inflation/CPI, whilst others would have increased them as well.
Trump has policies that will directly impact the fashion industry. Most significantly, increased tariffs will cause companies that are importing to raise their prices, most likely by at least 10%. Additionally, the tariffs on imported products from China are significantly larger than the ones from other countries, so companies will move their supply chains out of China, causing prices to be raised more to afford that. However, I predict that because of the raised prices in fast fashion brands, consumer demands will shift to more long term and sustainable pieces, ones made with high quality materials and ethical practices.
People should focus on making better shopping decisions as we see Trump’s policies impact the economy.
