Every December, shoppers rush to find the perfect gifts, but this year, hundreds of people are stopping mid-aisle, surprised by higher prices and limited choices. A pair of headphones costs more than last year, and a popular toy is suddenly out of stock. Concealed behind these shifts is a powerful influence that most consumers rarely consider: tariffs. These tariffs on imported goods are altering holiday gift-giving by affecting what retailers stock and the prices families pay. As a result, government trade policies are affecting what individuals place in their shopping carts.

Tariffs, at their simplest definition, are a tax that a government places on imported goods, which makes foreign products more expensive. And although they might seem like distant political decisions, these taxes have real effects on everyday shopping. AP Economics and Government teacher Mr. Baughfman explains that tariffs ultimately fall on consumers, saying, “Tariffs are something we call a regressive tax. Which means eventually down the line, somebody’s going to have to pay for it. It’s not like an income tax, where you are taxed based on how much money you earn in a year. It’s specifically based around things being purchased and being sold. What it comes down to is just that things become more expensive.” He added that this year’s broad tariffs on many imported items create a general rise in costs, meaning shoppers simply face more expensive products. When asked about whether tariffs are meant to be short-term tools or long-term strategies, Mr. Baughfman replies, “It depends on what the agenda for the politicians is. So, in terms of the short-term and long-term, if the United States didn’t want people to buy a particular product from this particular country. They would put the tariff on the country, so then when we import the product, it’s more expensive for us. So then maybe we change our attention to buy it from another country, or if possible, we buy it from being able to buy in the United States.” 

Hence, tariffs can be used for either short-term pressure or long-term goals, such as pushing Americans to buy from other countries or to eventually produce more goods domestically. But besides that, shifting production takes time since “you can’t just make factories overnight,” Baughfman states. So the U.S. often relies on imports. So, no matter the purpose the government wants, he explains that tariffs ultimately make products more expensive for consumers.

Tariffs generally increase prices, making it harder for people to afford items if their income does not rise accordingly to the current needs in this economy. Luxury items are categorized not solely by their cost but by intent; necessities like food and shelter heavily differ. When import taxes rise, businesses pay more to bring goods into the country, and these costs are frequently passed on to consumers. Mr. Baughfman explained how the shift of a popular holiday gift, “It’ll be more expensive than it may typically have been.” Expanding more on his answer by stating that higher prices make it especially difficult for families with tighter budgets. And that when cost arises, but income stays the same, the money people have simply doesn’t go that far. For example, if someone has $100 to spend and a $25 gift now costs $50 because of tariffs, they are suddenly restricted to buy much less. Which for many families means adjusting their budgets or reconsidering which gifts they can afford during the holiday season.

Although tariffs don’t just raise prices, they also influence what products stores decide to stock. As Paige Hoang, senior, has felt the effect directly as an intern working for her parent’s small business. “It’s taking a pretty big hit in my life,” states Hoang, “Many small businesses that require vendors from outside of the U.S. are feeling this price change. Small businesses cannot cheapen labor or take short cuts like large corporate businesses, so sacrifices have to be made on our end so profit can be made. Consequently, competition is really high and it’s getting hard for customers to get used to this price change.” When import costs go up, some retailers choose to carry fewer of those imported goods or look for cheaper alternatives from countries not affected by the tariff. Hoang also highlights that since the economy is bad, small businesses directly take that hit rather than bigger ones. 

As prices increase, many people shopping for the holidays often shift from their habits to stay within their budget. Some turn to less expensive alternatives, shop earlier in the season, or buy non-foreign products. Mr. Baughman has noted how these changes can quickly appear, expanding by answering that, “Prices often adjust based on anticipation, particularly regarding tariffs. Before implementing tariffs, many businesses proactively raised their prices to offset expected costs. For instance, if a product costs $100 and a 10% tariff is imposed, the total cost rises to $110. Companies, aiming for profit maximization, may increase prices immediately or choose to wait, but the likelihood of consumers purchasing in anticipation of further price increases influences this decision. Ultimately, tariffs contribute to increased costs for businesses, which are then passed on to consumers through higher prices as the market adjusts. By the time the products reach consumers, the prices have already been raised to accommodate these extra expenses.” 

With students even sharing how these changes affected their gift choices. Several students said they’ve already seen higher prices during holiday shopping. Sophomore Miley Torrez shared that, “I’ve seen them get more expensive because I’m trying to buy gifts for my friends right now, and it’s like a lot of money. I know just a lot of like cosmetics, perfume, hair products, and stuff like that,” while Senior Jonathan Uno mentioned that some items sold out faster than usual, like the PlayStation 5. When students were asked if higher prices would make them switch to different types of gifts. One student replied, “No. Well, kind of, cause, for instance, I wanted to get socks and then found out they are too expensive. So I looked for like stickers because I know the person I’m trying to give stickers to likes stickers.” Whereas another said that they would switch to something more affordable, like homemade or smaller gifts. Most students also mentioned that if a gift increased by $10-$20 due to tariffs, they would change their plan. Although when asked if students were to increase their budget in response to the rise in cost items, Junior Sal Tan answered that she would still raise her budget by a bit. Overall, their responses convey how tariffs shape holiday budgets and influence what gifts students end up choosing. And with what was stated, it really does show how the economy right now is not only failing businesses but the consumers as well.

In the end, tariffs don’t just affect businesses but also real shoppers. Students shared how price increases change what they buy and how they budget, reflecting the broader impact Mr. Baughfman implied. As holiday shopping continues, these experiences show how international trade policy touches everyday life.