Understanding the Impact of Tariffs on Your Wallet and How to Prepare

Last updated Jun 27, 2025

Are you wondering how tariffs may impact your wallet? Before you start worrying or rushing to stockpile goods, this article will explain what tariffs are and who pays for them, how they might impact your savings, and whether they influence interest rates.

Understanding Tariffs and Who Pays for Them

Explaining Tariffs

Tariffs may sound complicated, but they’re essentially taxes placed on imported goods and services. The main aim of tariffs is often to make imported items more expensive, thereby making locally produced goods more competitive.

Who foots the bill for tariffs?

The cost of tariffs usually falls on exporting companies, businesses, and consumers. These costs often end up as a hidden surcharge on your purchase. Even if an item is made in the U.S., it may still rely on imported materials, which could lead to manufacturers raising prices to cover those added costs. Find out how some companies have responded to recent tariffs by adding a $5 surcharge to cover tariff costs.

The Impact of Tariffs on Your Savings

While it’s not entirely accurate to say tariffs directly hit your savings, they can drive up the cost of goods. This could affect how much you spend and how much you’re able to set aside for savings.

The Relationship Between Tariffs and Interest Rates

Tariffs don’t directly impact interest rates, but they can influence them depending on how they affect manufacturing and consumption.

Shelby McFaddin, an investment analyst at Motley Fool Asset Management, explains that if tariffs strain the economy, slowing down manufacturing and reducing consumer spending, it could lead to rising unemployment. This could force the Federal Reserve to lower interest rates to stimulate growth.

So, while tariffs don’t automatically change interest rates, they can trigger economic shifts that lead the Fed to adjust them.

But despite high-yield savings rates dropping since the Federal Reserve began cutting rates late in 2024, many accounts are still offering returns well above 4% — a decent return for just letting your money sit there.

Consider, for example, the LendingClub LevelUp Savings Account and the Western Alliance Bank High-Yield Savings Account, both offering attractive rates.

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