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Low-income and fixed-income Americans may bear the brunt of President Trump's newly announced tariffs on Mexican goods, AP reports.
The big picture: Trump announced last week that he plans to levy a 5% tax on Mexican imports, increasing that number up to 25% in the ensuing months if Mexico does not address the flow of immigrants at the southern border. As the cost of everyday goods rises, low- and fixed-income households are expected to take the biggest hit. Meanwhile, more well-off households may be unaffected by the incremental increase in costs.
- Lower-income individuals would be hard hit because:
- This demographic generally spends the majority (if not entirety) of their incomes, while wealthier Americans are able to save or invest their money.
- Wealthier Americans are apt to spend on comforts that will not be tariffed. Those living closer to the poverty line spend a greater portion of their incomes on staples, including groceries and clothing — items that are often imported and therefore subject to tariffs.
- Despite the potential consequences, White House acting chief of staff Mick Mulvaney said Trump is "deadly serious" about the tariffs.
What's next: At a press conference with Prime Minister Theresa May on Tuesday morning, Trump said he expects the tariffs to take effect next week.