INDIANAPOLIS — We've been hearing the word "tariff" quite a bit lately.
President-elect Donald Trump said on his first day in office he'll impose tariffs on goods from several countries like Mexico, Canada and China. With the holiday shopping season in full swing, that has some consumers buying big-ticket items now.
'Tis the season to find a deal for shoppers like Lynn McCready.
"We got a TV. We got an air fryer and a good start on our Christmas presents," said McCready as she left a Best Buy store in Indianapolis.
McCready is glad she's shopping for big items now, when she thinks about the tariffs proposed by the new president.
"I think it's going to be a huge problem. I think people were really hoping all the prices were going down and I think the exact opposite is going to happen," McCready said.
"I think everything's going to pan out the way it needs to be," said David West, who isn't concerned about the possibility of tariffs on good imported to the United States. "There's worse things to worry about than that."
"A tariff is simply a tax that's placed on any good that's imported from outside the United States into it," explained economist Kyle Anderson with the IU Kelley School of Business.
According to Anderson, companies importing goods or materials into the U.S. pay the tariffs up front.
Think electronics imported from Asia. Companies eventually pass the cost of tariffs onto the consumers.
"The prices get higher, so consumers are ultimately paying for the tariff," Anderson explained, saying the first place Hoosiers could feel the impact of tariffs is at the gas pump.
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"We actually bring in quite a bit of oil from Canada and so that would be reflected pretty quickly in our gas prices going up significantly," he said.
Another raw material the U.S. imports from Canada is lumber.
"If I'm a builder and I'm going to buy a house, I might try and charge a higher price now, knowing my cost of goods are going to go up," Anderson said.
Even with anticipated price increases, Anderson doesn't advise spending like crazy now, but instead is advising to wait and see how talk of tariffs plays out.
"I wouldn't panic and go out and buy a bunch of things," Anderson said.
"We got the deal now," said McCready, who didn't want to wait. "It's going to be a Merry Christmas."
