How to deal with tariffs, according to an economist

Summer is winding down, and with it comes a return of the worries we’ve set aside all season. Whether it’s the challenges of a new school year, unfinished home projects, or looming deadlines at work, the easygoing vibe of summer often lets us forget about the stresses waiting in the months ahead.

But this year feels different. For many households across the country, one concern stands above the rest as fall approaches: the rising impact of tariffs.

“Each household will have to suffer real income loss, about $2,100, in 2025,” said Kaiji Chen, an economics professor at Emory University.

According to the Yale Budget Lab, the overall effective tariff rate for American consumers is at 18.6%. This is the highest rate since 1933, meaning imported products are now much more expensive than usual. As a result, overall prices are expected to rise by 1.8% because of the tariffs. This includes everyday items.

“It will impact the price level and the real effective income of households,” Chen said.

Inflation is up, according to Chen, at 2.6% in July, compared to the Federal Reserve Bank’s estimation of 2%.

He’s already noticed clear signs of inflation — like the price of his lunch at Emory rising since May — which he says signals a future “erosion of the household and its true purchasing power.”

But Chen says panicking is not the answer. Instead, there are practical steps you and your household can take to navigate the impact of these tariffs and get through this economic downturn together.

Defer large purchases

During times of economic uncertainty, the big ticket items that you may have been planning to purchase do not go away. If possible, hold off on buying them until prices...