How new 2025 tariffs will affect families & tips to stay on budget

In March 2025, the U.S. implemented new 25% tariffs on many imports from Mexico and Canada, with a 10% tax on Canadian energy imports such as natural gas and oil. In addition, the 10% tariff set for China earlier this year will increase to 20%. Will these rising tariffs affect families? How can we keep our budgets on track this year? Here, we dive into tariffs and how they work. Then, top tips to start using today to help your family manage potential rising costs.

What are tariffs, and how do they affect prices?

Tariffs are taxes on imported goods and services. The goal is to protect domestic industries like automobile manufacturing, agriculture, steel production, and consumer electronics. These taxes generally increase the cost of products from foreign countries to encourage consumers to buy domestically produced products and services. 

In some circumstances, tariffs can result in cost-push inflation, when the cost of providing products goes up (from an increase in wages, materials, or even tariffs) and businesses charge more for their products to cover the extra cost, making everything more expensive.

How tariffs impact family budgets

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Tariffs can increase the cost of many types of goods and services that families use every day, such as:

• Groceries. Many fresh foods (especially berries, avocados, and citrus fruits) come from Mexico and Canada, which makes them subject to price increases.

• Electronics. The tariff on Chinese imports affects many tech products we use. This can add hundreds of dollars to retail prices. 

• Appliances. Dishwashers, refrigerators, microwaves, and other appliances made with Chinese parts may begin to cost more.

• Cars and car parts. Families may see increased costs for vehicles with parts from Canada and Mexico. Even if you’re not in the market for a new car, auto parts and tires could become more expensive.

• Gasoline. With the tariffs on Canadian crude oil, we could experience higher gas prices in the U.S., adding to the cost of transportation.

7 practical tips to help families stay on budget

Since tariffs and other rising costs are beyond our control, what can you do to keep your family budgets on track?Here are a few ways to adjust and prepare your budget for the potential impact of tariffs.

1. Choose local and seasonal produce

Buying in-season fruits and vegetables grown in the U.S. can help keep grocery costs down. Sticking to what's locally available avoids tariff-driven price hikes and makes it easier to stay within budget at the store.

2. Buy in bulk when possible

If you can stock up on non-perishables, it can help spread out the costs over time and save you some money later if daily purchases cost more. See more about the pros and cons of buying in bulk.

3. Delay big purchases

If you can, consider holding off on buying cars, electronics, and major appliances until prices settle. In the coming months, retailers may adjust prices or offer discounts as any initial impacts even out.

4. Consider used rather than new products

What if you truly need that new washing machine (or car!) now? If you must make a major purchase, consider buying used products. This may mean looking at used cars, refurbished electronics, and second-hand furniture. 

5. Get creative with gas usage

If you're concerned about how the tariffs might impact transportation costs, now is a good time to explore ways to save on gas costs. Carpooling, planning your routes to reduce idle time, and using cruise control when possible can save gas money. You can also use apps like GasBuddy and Waze to find cheaper gas stations.

6. Cut back on non-essentials

If you experience financial anxiety, take a few minutes to review how your budget balances wants vs. needs. Are there areas you can adjust your spending habits to save more in case of rising costs?

7. Track expenses and adjust as necessary 

Keeping an eye on your spending and how it affects your family’s budget can make a big difference. If tracking expenses is not something you do regularly, these budgeting principles will get you started, and these budget apps can help you stay on track.

So, while new 2025 tariffs may impact family budgets, you can help keep control of your finances by adjusting your family’s spending habits and consistently tracking expenses.

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