How You Can Prepare For Further Tariff-Related Economic Turmoil

Many American consumers have struggled to catch the Kovid -19 epidemic and after that of stubborn inflation, and experts say tariffs can add to their financial troubles.

President Donald Trump has imposed a global 10% tariff on all imports in the US and additional tariffs on some closest trading partners in the country. Economists believe that tariffs will increase costs for American consumers and reduce economic growth. Consumers seem to agree.

In a recent consumer-based survey of JD Power, a data analytics and consumer intelligence company, about 6 out of 10 US consumers say that they emphasize their overall financial situation to some extent, and 53% said their stress has increased in the last month.

About half said that they would buy less non-essential goods and major purchases in the next year. Additionally, most Americans said that the US is already or there is a lot of possibility of experiencing recession in 2025, and tariffs will increase inflation.

Investopedia spoke to JM Miller, Deputy Chairman and General Manager of Financial Services at JD Power, about the consumers’ approach and how they can adjust their budget to prepare for tariffs. The interview has been edited for brevity and clarity.

Investopedia: What is the general attitude of consumers about the current economy?

Jim Miller: There is a high level of concern. I would say that consumers are still very concerned about prices, and number one is about the price of food and everyday items. So I think it’s all about eggs and this type. Therefore, sensitivity increased after inflation recently, they are expecting inflation from where it will increase.

Investopedia: How are they preparing for economic upheaval related to potential tariffs?

Miller: We asked what they will do during the so -called ‘stagnation’, or when the tariff is being detected. Number one was said to be 41% that they are going to start cut back when they spend more clarity.

Now, the flip side of 27% said that they would stock up on everyday goods before the price increases. So it is similar to cutting back at expenses, but perhaps a short -term growth in buying things that you expect to go up in the price.

Investopedia: What are your recommendations how consumers can prepare for the increased prices from tariffs?

Miller: We are going through the challenges of five-plaus years between epidemics and then inflation, so this is another blow to consumers. One of the things we see is that about half of the consumers are salary to be paid or back … Generally, about 45% of consumers are financially healthy. This kind of this kind is different, and this is what we saw here.

If you are not already financially healthy, this is just another challenge that you have to overcome. So I mean, it is a lot of basics: a budget, following a budget, making sure you are investing on one side for an unexpected expense.

Trying to create a financial buffer in your life, which I know it is not easy, but it becomes more important because we pass through these periods.

Investopedia: How can consumers make that financial buffer quickly?

Miller: If you already have some money, you have very important. Many large banks with savings accounts are still close to zero. If you shop around, you can find more than 3%, 4%, elsewhere in some cases. Therefore, in search of that high rate, the high-upper savings account is a good step if you have money.

The second thing is to use budget equipment. So many banks and financial institutions present their customers. We still look at the relatively low adoption of those devices, but we see that when consumer starts using budget equipment, it helps in their personal financial condition. They become more satisfied with their bank.

Investopedia: What are your recommendations that how consumers are still in a financially healthy place, tariffs can live there in the midst of turmoil?

Miller: One is making sure that you are living in that category, and it seems that many of them are already making major purchases. Drive your car for a while until things just go. Depending on where they are within him, they can have money in the market, and this is a challenging time. The best time to make a change will be two or three months ago, and we all felt pain from that point.

One thing is just to reduce stress. Do not see your 401 (K) every day to see if it is really for your retirement – until you are close to retirement. Keep walking with your … strategy. The market has always reversed. It only depends on how much time it takes. So, stay the course.