5 Ways to Win Your Wallet
It finally happened.
In a move that sent shockwaves through Washington and Wall Street alike, the Supreme Court recently took the hammer on President Trump’s global tariffs.
In a 6-3 decision issued today, the court ruled that the president does not have the legal authority to use the 1977 emergency law to tax almost everything entering the country.
Prices did not go away completely; Trump has other tariffs, and they are expected to be used more widely. However, they will not be widespread or capricious.
If you’ve been feeling the pinch at the checkout counter for the past year, this is the news you’ve been waiting for. According to SCOTUSblog, a news site focused on US Supreme Court coverage, the justices ruled that the power to impose taxes belongs to Congress, not the White House.
While politicians argue about the “separation of powers,” we are interested in the “division of dollars” in your pocket. Here’s how this landmark decision could change your financial life in the coming months.
1. Low prices on big-ticket technology
If you’ve been putting off buying a new laptop or smartphone because of the “tax bill,” you may want to start shopping again soon.
In the past year, electronics prices have jumped 10% to 25% as companies pass the cost of imported chips and components directly to you.
Now that the legal arena is out from under those jobs, we should see those prices start to come down.
Related: See 9 Ways to Avoid Price Gouging
2. Help at the car dealership
The auto industry was hit hard by the administration’s trade policies. Between the taxes on used cars from Canada and Mexico and the tax on imported parts, the average price of a new car has increased by thousands of dollars.
According to the Associated Press, the Supreme Court ruling effectively eliminates the 25% tax on most imported cars and light trucks. If you’re in the market for a new ride, this could mean a more manageable monthly payment is just around the corner.
Related: See Why Car Prices Are Rising – and How to Save
3. A break from your grocery store
We’ve talked before about how tariffs act as a hidden tax on your dinner table (See The Tariff Trap: How to Pass the Bill for Global Trade Wars). Everything from Mexican avocados to Canadian berries have seen their prices rise as a result of these trade disputes.
As the Supreme Court lowers various prices, the cost of grocery chains to deliver the product should come down. Look out for flyers in your local store; You will likely see aggressive sales as food import costs drop.
Related: Check out 8 Simple — But Often Forgotten — Ways to Save on Shopping
4. The “sticky price” is a real check
Just because a company’s costs are going down doesn’t mean they will immediately lower your rates. This is what economists call “sticky prices.”
Companies have spent the last year training us to accept higher costs. They may try to keep their prices where they are to squeeze out their profit margins.
It’s up to us to be smart shoppers. If your favorite brand isn’t reducing its prices as the prices are gone, it’s time to look for a competitor willing to pass on those savings.
5. Wind that may be the return of businesses
One of the worst parts of this decision is the potential for the recovery of $150 billion to $200 billion.
Companies that paid these taxes to the US Treasury are now lining up to get their money back. Although you won’t get a check in the mail directly from the government, this huge financial contribution to the business sector could prevent further layoffs and stimulate some employment.
It may also give the stock market a rally, which is good news for your 401(k).
The bottom line is that the era of “price-driven inflation” may finally be cooling down. We’ve spent months telling you how to save and save, but now it’s time to switch gears.
Be patient, keep your eyes on the labels, and don’t let the sellers keep the savings the Supreme Court just gave you back.
