U.S. tariffs have climbed to their highest average rate since 1934, and consumers may soon notice the difference when shopping for shoes, handbags, and other everyday goods. According to a July report from Yale University's Budget Lab, the average effective tariff rate is now 18.2%, with some categories — especially apparel and leather goods — facing much steeper hikes.
Why This Matters for Shoppers
The Budget Lab projects that leather products such as shoes and handbags could see prices rise by as much as 39% because of new and increased tariffs. Apparel and textiles may follow close behind, with price increases projected around 37% to 39%.
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For now, some retailers must absorb the added costs. "We know from surveys that companies feel that they have every intention of putting this through to the consumer," Federal Reserve Chair Jerome Powell told a news conference on July 30 after the Fed voted to keep interest rates steady amid concerns about tariffs and inflation. "But, the truth is, they may not be able to in many cases."
How We Got Here
A wave of tariffs announced by the Trump administration took effect in early August, following months of negotiations and delays. The measures include blanket baseline tariffs across several countries — generally around 15% — plus higher rates for certain countries and products.
For example:
- European Union goods face a 15% tariff, including wine and spirits.
- Canada is now subject to a 35% tariff on many items, up from 25%.
- Brazil faces a 50% rate after recent increases.
- China is in a 90-day truce with the U.S., currently facing 30% tariffs instead of the initially planned 145%.
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Additional targeted tariffs are also in place, such as 50% on steel and aluminum and 25% on automobiles and parts.
What's Next for Imports
Tariffs are not just higher — they're also more widespread. In late July, the White House announced plans to end the long-standing "de minimis" exemption, which has allowed low-value packages to enter the U.S. without tariffs. This change, set to take effect Aug. 29, could affect many smaller online purchases from overseas retailers.
More tariffs are under consideration for goods like lumber, pharmaceuticals, and rare earth minerals. Negotiations with major trade partners are ongoing, and in some cases, temporary pauses are in place.
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Legal Challenges Could Change the Outlook
A federal appeals court is currently weighing whether some of the tariffs overstep presidential authority. Earlier this year, a trade court judge ruled that certain measures exceeded the scope of the International Emergency Economic Powers Act, which President Donald Trump had invoked to impose tariffs. The case is now in the U.S. Court of Appeals for the Federal Circuit and could ultimately reach the Supreme Court.
If the court strikes down portions of the tariffs, it could ease some price pressures — but legal proceedings may take months or years to resolve.
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