'You will pay more': Dave Ramsey explains how Trump's tariffs will impact Americans 'on a personal level' — says 'there's no question' prices will go up. But there's 1 reason to be optimistic

Supercharging the cost of living

Economists and financial experts broadly agree that the costs of trade barriers and import taxes are eventually passed along to consumers.

"There's no question that's how tariffs work," Coleman said while explaining that U.S. companies are ones paying tariffs imposed by the government for goods they import. "I've never seen companies not pass on increased costs to customers."

Ramsey agreed with Coleman's assessment.

“You will pay more, no question about it, 100%," Ramsey said. "Companies do not eat taxes.”

These concerns were also raised last year in a letter signed by 23 Nobel Prize-winning economists warning that Trump’s planned trade tactics would be inflationary. According to estimates by the Peterson Institute for International Economics, a typical American family could lose $1,200 as a result of tariffs announced in February, similar to those imposed in March. Since the original estimates, however, Trump has raised tariffs on China an additional 10% and threatened further tariffs on Canadian dairy and lumber products.

For many Americans, these added costs come at a time when they’re already struggling with high living costs. Nevertheless, Coleman was optimistic about what comes next.

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Reasons for optimism

Despite increased costs as a result of tariffs, Coleman argues that American families and corporations are also looking forward to good news on the tax front. The Tax Cuts and Jobs Act (TCJA) of 2017 is set to expire on Dec. 31, 2025, but President Trump and Congress are considering extending the program.

“If the president also extends his tax cuts, which will expire later this year, that would help the American consumer in lowering your costs," he argued. "You keep more of your paycheck.”

It should be noted, however, the Peterson Institute also estimated the net impact of announced tariffs with a TCJA extension. Although the tax cuts would mitigate the effect of tariffs, a typical U.S. household — and those with lower incomes — would still pay more. Higher-earning families, on the other hand, would experience positive impacts.

One hopeful scenario is that Trump might either wrap up the trade war swiftly or provide much-needed exemptions and relief for critical products. The administration has already announced a one-month exemption for some automakers in Canada and Mexico, signaling some pockets of relief.

Either way, consumers should brace themselves for higher costs and more uncertainty in the months ahead. If you’re worried about your household budget, consider bolstering your savings and look for domestic alternatives for essential products.