Trump’s Tariffs Begin to Bite: U.S. Consumers Brace for Price Hikes as Companies Pass on the Cost

U.S. President Donald Trump’s new wave of tariffs is beginning to take hold—and American companies are making it clear who will bear the brunt: the consumers.

Throughout the spring, major retailers and consumer goods manufacturers warned that escalating levies on imported goods would pressure their bottom lines, leaving them with a stark choice—absorb the impact or pass the additional costs on to customers.

On Tuesday, Procter & Gamble, the multinational behind household staples such as Bounty paper towels and Tide detergent, delivered a cautionary outlook for 2025. The company signaled to key retail partners, including Walmart, that it would begin raising prices on select U.S. products as early as next week in response to the tariff burden.

This development is a sign of what’s to come. P&G announced it will increase prices on approximately 25% of its U.S. portfolio to offset the new import levies. According to a company spokesperson, the hikes will range in the mid-single digits across product categories.

While equity markets—particularly technology stocks—have rallied to record highs this year, many consumer-facing firms have lagged. Since Trump’s “Liberation Day” tariff announcement on April 2, consumer staples have seen notable declines: P&G shares are down 19%, Nestlé has fallen 20%, Kimberly-Clark is off 11%, and PepsiCo has dropped nearly 7%, even as the benchmark S&P 500 index has climbed over 13%.

The tariff impact, however, extends beyond stock performance. Since the pandemic, consumer goods and food companies have struggled with stagnant sales, as price-conscious shoppers increasingly shy away from premium branded products. Nestlé recently confirmed that North American consumers remain hesitant to pay more at checkout.

For investors, the looming question is how big brands will manage the twin pressures of slowing demand and rising costs triggered by Trump’s trade policies.

“You’re going to see companies like Walmart, Amazon, and Best Buy forced to pass price increases to consumers,” said Bill George, former CEO of Medtronic and current executive fellow at Harvard Business School. “Main Street has yet to feel the full impact of these tariffs—and they’re likely to rise further.”

According to Reuters’ global tariff tracker, companies projected losses between $7.1 billion and $8.3 billion for the year in the period between July 16 and 25.

Automakers like General Motors and Ford have already absorbed billions in tariff-related costs. Many manufacturers accelerated shipments of goods and raw materials ahead of tariff enforcement, temporarily delaying consumer price increases. Analysts say this stockpiling strategy explains why tariff-related inflation has not yet fully surfaced in economic data.

Andrew Wilson, Deputy Secretary General of the International Chamber of Commerce, expects inflationary effects to become evident once inventories are depleted—likely by the fourth quarter of 2025 or early 2026.

Some firms, however, have already acted. EssilorLuxottica, the maker of Ray-Ban sunglasses, has raised prices. Swiss luxury watchmaker Swatch also implemented a 5% price increase following the April tariff announcement, but CEO Nick Hayek reported "zero impact" on sales.

According to Hayek, premium brands like Tissot are more resilient to price shifts. “Consumers buying high-end watches may opt to purchase them abroad, where tax rates are lower,” he noted. “You can’t do this with cars or machinery, but with watches, it's less of an issue.”

As the tariff landscape continues to evolve, U.S. households may soon feel the full financial ripple of a global trade war playing out at the register.