If you were hoping corporations would take one for the team and absorb the cost of new tariffs, financial expert Dave Ramsey has some bad news: They won't.
With President Donald Trump's latest executive order on tariffs stirring up controversy, consumers are left wondering what it means for their wallets. The plan? Pressure trade partners and boost U.S. manufacturing. The reality? Well, let's just say Walmart isn't in the habit of handing out charity discounts.
When Brianna from Washington, D.C., called into The Dave Ramsey Show with the million-dollar question—"How will Trump's new tariffs affect me personally?" co-host Ken Coleman didn't dance around it.
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Prices Will Go Up. No Question.
"Tariffs will affect us, there's no question… Even President Trump has said, and I quote, that prices will go up," Coleman explained.
It's Economics 101: when the government slaps a tax on imported goods, businesses pass that cost straight to the consumer. Coleman put it bluntly: "I have never seen companies not pass on increased costs to consumers."
Still, he acknowledged the long-term effects are uncertain: "It's too soon to tell" how it'll all shake out.
Ramsey's Take: Not So Fast.
Ramsey agreed that prices will rise, but he wasn't convinced the situation was as dire as some might think. He pointed to existing trade policies—like Mexico's long-standing 33% tax on U.S. goods—as proof that tariffs aren't necessarily economic doomsday.
"If you're an American company wanting to sell things in Mexico, you face a 33% upcharge today. That's been in place for years. Did it crash either economy? No. Did it slow down business in Mexico? Yes. That's the net effect," he said.
And while Americans will undoubtedly feel the squeeze, Ramsey noted that other countries might have more to worry about: "Canadians are very, very afraid of what it's going to do to them. It's much more damaging to them."
That said, he wasn't about to let consumers off the hook:
"You will pay more. No question about it. 100%. Companies do not eat taxes," Ramsey stated.
To drive the point home, he laid it out in everyday terms:
"Corporate taxes are built into the price of the item you buy from Walmart. Walmart does not pay taxes. You pay taxes when you buy potato chips at Walmart. You pay all their taxes for them. It's built into the price. They don't work for nothing."
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Coleman's Optimism: Tax Cuts Could Change the Game.
Coleman, however, argued there's another factor at play—tax cuts and deregulation.
"If the president extends his tax cuts, that will help the American consumer," he said. "The second thing I think he'll do is cut regulations on American businesses, and that also offsets tariffs."
Translation? If Trump plays his cards right, "You won't feel it." And Coleman is betting that's exactly what will happen.
Ramsey's Prediction: This Is a Negotiation Tactic.
Ramsey had a different theory. In his view, these tariffs are less about long-term policy and more about leverage.
"It already appears as though none of this is going to happen with Canada and Mexico. That's my opinion. But it may require that Mexico and Canada start treating American goods the way we treat theirs," he said.
He compared Trump's tactics to a street brawl: "I think Trump threw a grenade in the middle of it to get some other stuff. He's a New York street fighter, and that's how he negotiates."
Instead, Ramsey predicted countries like Vietnam—where trade imbalances are significant—would be the real targets of tariffs, while Mexico and Canada will likely reach a deal.
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Should You Worry? Ramsey Says No.
For those worried about rising costs, Ramsey had one simple piece of advice: don't panic.
"Debt-free people aren't worried about inflation. And they're not picking up goods in their house going, ‘Wait a minute, was this made in Canada?'"
As for all the economic doom-and-gloom?
"Most of what's on the news is malarkey."
Bottom line: If tariffs take effect, prices will rise. But Coleman believes tax cuts will offset the pain, and Ramsey thinks the tariffs on Canada and Mexico might not even happen. Either way, don't expect corporations to take the hit—it's coming straight to your receipt.
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