The Trade War Price Hikes Are Starting To Hit, And They Certainly Aren’t Small

When prices go up, our standard of living goes down. That is the way that it works. I have been writing quite a few articles about the shortages that the global trade war is going to cause in the months ahead. Without a doubt, they will be extremely painful. But there will also be very large price hikes in many cases, and some of those price hikes are already starting to hit. For example, Ford has just announced that the prices of some of their vehicles will be raised by as much as two thousand dollars…

Ford Motor Co. is increasing prices on its Mexico-built vehicles by as much as $2,000, becoming one of the first automakers to announce a price hike because of tariffs.

Changes on dealer invoices became effective May 2 on the Maverick small pickup, Bronco Sport SUV and Mustang Mach-E all-electric crossover, according to the memo obtained by The Detroit News. That means affected vehicle will arrive on dealership lots in late June, the company confirmed. The Dearborn automaker attributed the hike to usual midyear pricing action as well as tariffs.

For most of us, the fact that Ford is raising new vehicle prices dramatically isn’t going to really affect us much, because we can’t afford to purchase a new vehicle anyway.

But for those that are in the market for a new vehicle, this is going to make a significant difference.

Two thousand dollars is a lot of money. Once upon a time, I actually purchased an entire vehicle for about two thousand dollars.

Of course it isn’t just Ford that is facing higher costs due to the trade war. General Motors is estimating that the tariffs will cost the company between four and five billion dollars in 2025…

Ford earlier this week said Trump’s trade war would add about $2.5 billion in costs for 2025, but it expects to reduce that exposure by around $1 billion. Rival General Motors (GM.N), said last week that tariffs were projected to cost it between $4 billion and $5 billion following the imposition of hefty levies on foreign imports of automobiles, but it expected to offset that by at least 30%.

A Ford spokesperson said the price hikes will affect vehicles built after May 2, which would arrive at dealer lots in late June.

Ultimately, almost all new vehicles will become substantially more expensive, because even vehicles that are “made in America” contain parts that are manufactured overseas.

So lots of us will just purchase used vehicles instead, right?

Well, when demand for used vehicles goes up that just drives up prices. In fact, that is already happening…

A closely watched barometer for used vehicle pricing jumped last month to its highest level since October 2023 as consumers rushed purchases amid fears of price hikes due to auto tariffs.

Cox Automotive’s Manheim Used Vehicle Value Index — which tracks prices of used vehicles sold at its U.S. wholesale auctions — increased 4.9% last month compared with a year earlier to a level of 208.2.

Do you remember when used vehicle prices went absolutely haywire during the pandemic?

I think that we will be facing a similar scenario during the months ahead.

Sadly, just about everything is going to be getting more expensive. One small business owner says that he is going to “start adding a tariff tax line item directly to the price tags” of all of his electric bikes…

I’m a Republican business owner who’s been running an adventure travel business for more than 30 years. We operate multiday motor tours and road bike tours with hiking, mostly in the Southwest, and a hut-to-hut mountain biking route in Utah. We also own retail bike shops in Las Vegas and Utah.

Recently, I made the decision to start adding a tariff tax line item directly to the price tags on certain products in our stores, especially electric bikes. All of our electric bikes from our major supplier are going to cost 10% more.

This is just the beginning.

Products from China that are now arriving at U.S. ports will have extremely high tariff rates imposed on them…

Ships now pulling into US harbors from China are the first to be subject to the massive tariffs that America is imposing on most Chinese imports. That means, in a matter of weeks, consumers will face higher prices and shortages of certain items.

Imports from China have fallen dramatically since Trump imposed steep tariffs – particularly since last month, when the tit-for-tat trade war sent the tariff on most Chinese goods up to 145%.

Are you ready to pay 145 percent more for goods that are made in China?

Companies realize that most of us are not willing to do that, and so trade across the Pacific is falling off precipitously…

U.S. import booking volumes have dropped 35% since late March, according to the shipping data company Vizion, including a 26% drop between the week ended April 21 and the following week. Shipments from China dropped nearly 43% in the last full week of April, the sharpest decline of the year. During April, several weeks saw China import bookings down by more than half, Vizion said.

The potential impact on companies and consumers is broad. Imports of Chinese electronics, plastics, vehicles, steel, and textiles have all fallen by more than half.

Perhaps just as concerning for some farmers and U.S. manufacturers is that export bookings to China have also collapsed. In the last full week of April, the number of 20-foot-equivalent containers booked to go to China fell 73% from a year earlier, the fourth consecutive week with at least a 60% drop, Vizion said.

This is going to be absolutely devastating for our economy.

Of course the Chinese economy is being absolutely devastated as well…

The chill gripping China’s services industry follows a broader collapse across key sectors of the country’s economy. Financial institutions are in steep decline, with the country’s six largest banks reporting combined first-quarter losses of more than $1 billion, The Epoch Times reported. The construction industry also fell short of market expectations in April, but manufacturing has taken the hardest blow. New export orders dropped to their lowest point since December 2022, and cargo shipments to the U.S. have plunged by 60%.

With more than 16 million Chinese workers tied to export-driven manufacturing, the fallout is spreading fast. Thousands of workers have walked off job sites and taken to the streets in recent weeks to protest unpaid wages, and some have even threatened suicide.

Many were hoping that the economic pain that the Chinese are experiencing would drive them to the negotiating table.

But it turns out that the upcoming negotiations that will take place in Switzerland were actually initiated by U.S. officials…

The upcoming meeting in Switzerland between U.S. Treasury Secretary Scott Bessent and his Chinese counterpart was requested by the Trump administration, Chinese officials said Wednesday.

China will be entering the talks “firmly” opposed to U.S. tariff hikes, and willing to participate only in a dialogue “based on equality, respect and mutual benefit,” Foreign Ministry spokesman Lin Jian wrote on X.

Those that are expecting the Chinese to surrender are going to be deeply disappointed.

The Chinese are extremely angry, and they are in no mood to compromise.

If you doubt this, just consider what an official from China’s Ministry of Commerce just said about the upcoming negotiations…

If the U.S. wishes to resolve issues through negotiation, it must face up to the severe negative impacts of its unilateral tariff measures on itself and the world, acknowledge international economic and trade rules, fairness and justice, and the rational voices of all sectors, demonstrate sincerity in negotiations, correct its wrongdoings, and work with China to resolve mutual concerns through equal consultation.

If the U.S. says one thing but does another, or even attempts to use negotiations as a pretext to continue coercive and blackmailing tactics, China will never agree, nor will it sacrifice its principles or international fairness and justice to seek any agreement.

The Chinese are expecting the U.S. to back down.

I don’t believe that is going to happen.

President Trump will never go back to the way that things were before.

And the Chinese have no intention of giving President Trump what he wants.

So for now we are at a stalemate, and that means we will be facing higher prices, shortages and empty shelves in the months ahead.

Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

About the Author: Michael Snyder’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com. He has also written nine other books that are available on Amazon.com including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. When you purchase any of Michael’s books you help to support the work that he is doing. You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter. Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.