How Trump’s election victory could affect your wallet

Now that Donald Trump has been declared the winner of the 2024 election, American consumers are on the lookout for what a Trump 2.0 presidency will mean for their finances.

From investment portfolios to childcare costs, there could be substantial changes. Central to Trump’s overall platform is his plan to enact tariffs on nearly all US imports, which is seen as something that could drive inflation higher.

Detailed below are five categories — investments, overall costs, housing, taxes, and childcare — that US consumers can expect to feel impacted by a new Trump presidency.

Investments

Trump’s plan to cut the corporate tax rate is generally viewed as bullish for earnings, particularly for the consumer-discretionary, communication-services, and financial sectors. But his plan to tax all US imports is seen as a headwind that could be inflationary and hit consumer spending.

If those inflation worries come true, interest rates would be higher and push bond prices lower. Trump is also seen as bullish for crypto, and his protectionist policies are viewed as likely to push the dollar higher.

These moves played out after Trump secured victory, with the so-called Trump trade soaring: Stocks, Treasury yields, the dollar, and bitcoin moved sharply higher.

Costs

Trump’s plan to impose a broad-based 10%-to-20% tariff on most goods brought in from other countries — and as much as 60% on Chinese imports — is widely expected to make import-reliant products more expensive. Major categories with high potential tariff exposure include automobiles, drugs for human and veterinary use, food and beverage, furniture, and household appliances.

Relatedly, the former president has previously said he’ll lower grocery prices by restricting food imports to bolster domestic producers.

Housing

Trump said on the campaign trail that the ongoing housing shortage could be addressed by deporting millions of people from the country. The newly elected president has also said he could decrease demand by banning mortgages for immigrants living in the US illegally.

During his previous White House tenure, Trump opposed the construction of high-density housing in single-family-zoned areas, though he didn’t say during this election cycle whether he wanted to continue pursuing similar policies.

Further, if Trump’s presidency is inflationary and leads to interest-rate hikes, that would hit housing affordability in the form of higher mortgage rates, which track the Federal Reserve’s benchmark.

Taxes

Trump has proposed lowering the corporate tax rate from 21% to 15% for firms that make their products in the US.

The former president has also said he plans to extend his slew of tax cuts from the Tax Cuts and Jobs Act of 2017 — also known as the “Trump tax cut.”

A permanent continuation of the TCJA’s income-tax provisions would amount to a nearly $280,000 tax cut for the top 0.1% of earners, compared with $1,000 for middle-income Americans, a Tax Policy Center analysis found. Trump’s plan for universal tariffs is seen as offsetting a positive tax impact and would be especially costly for lower-earning Americans.

Childcare

Trump has proposed expanding the child tax credit, which currently provides up to $2,000 per child. In August, the vice-presidential candidate JD Vance floated a child-tax-credit proposal that would include $5,000 per child for families of all income levels.

In addition, while previously in office, Trump signed a bipartisan bill that provided federal employees with 12 weeks of paid parental leave, though he didn’t emphasize the issue on the 2024 campaign trail.