Tariff trickle down- higher prices hitting home
Installing air conditioning or replacing your furnace could soon come with a higher price tag, and not just because of the warmer weather.
The new steel tariffs imposed by President Trump are hitting home. It's an early sign of the tariff trickle down factor.
Steel is a daily fact of life for the team at All Phase Heating and Air conditioning. Heating in Mount Vernon and A/C systems require sheet metal duct work, and lots of it.
"You'll see it coming off the equipment underneath the house," explained said owner Jon Small. "The distribution duct work to make the air go from the furnace to the floor registers."
Small said because of the home construction boom in much of the Northwest, he's already seen two price increases for steel supplies of 4 percent each.
"All the furnaces are 90% steel product," he said.
Factor in new tariffs on steel and aluminum imports, and Small's bracing to pay even more for the steel he needs to make a living, which means his customers - builders and and homeowners- will pay even more too.
"We have to pass it along, just like everybody's going to do. The car manufacturers, everybody that the tariff affects," said Small.
Money and business experts said Small is right.
Combined with additional tariffs imposed against the U.S. by Mexico, China and Canada, we should also watch prices on products as varied as new cars, soy products, pickles, soup and ketchup.
With no crystal ball, Small said he won't start to worry, unless the economy begins to stall.
"When it starts leveling off and declining a little, then I'll be a little worried," Small said.
Until then, as both a business owner and a consumer, he's preparing to pay more and planning ahead.
"You save your money. You make hay while the sun's shining. Save your assets and build as many as you can while the economy is good," said Small.
He's also hoping the tariff trickle down will be both manageable and short lived.
Economy and finance experts claim if we do see wide-scale tariff-related price hikes, it will probably happen late this year for certain new cars, and next year for other products.
But, a variety of factors could change things including the response of consumers in Canada, China and Mexico to higher prices on American products hit by export tariffs to those countries.