The United States intends to impose tariffs on countries around the globe to raise revenue and boost domestic production. A tariff is a tax that companies pay on imported goods. For example, President Donald Trump enacted a universal 10 percent tariff on all imports, effective April 5. And reciprocal tariffs ranging from 11 percent to 50 percent were imposed on more than 50 countries, before they were paused for 90 days for all nations except China.
As a result of these added expenses, many companies could decide to raise prices on their products. For instance, retailers such as Walmart and Target have announced price hikes. More than half, or 54 percent, of U.S. companies expect to raise prices due to tariffs, according to a survey by financial services company Allianz.
Nonetheless, some experts say these fears are overblown.
If faced with tariff-induced price hikes, there are some steps you can take to cushion the blow.
Revisit Your Budget
During high inflationary periods, it may be a smart move to rework your budget and see where you could cut back. Perhaps you have subscriptions you don’t use or aren’t using enough. Maybe you can replace streaming services with free alternatives. Or you can cancel your gym membership and look up a home workout routine.
Whatever you can cut back on that’s not essential can help you save money, as you become more disciplined in your spending habits.
Open a High-Yield Emergency Fund
These days, many online banks are offering high-yield savings accounts with competitive interest rates. Today, you can shop around and find savings accounts that pay close to 5 percent interest—which dwarfs the national average of around 0.42 percent, according to the Federal Reserve. Many of these banks also offer accounts with little to no maintenance fees, which is a major plus. You could also consider the following options to park your money and watch it grow.
Money market account: This option tends to pay higher interest rates than traditional savings accounts. But these could be more liquid, as many are tied to debit cards. So in the case of an emergency, you can quickly access your funds via an ATM.
Certificate of deposit (CD): With a CD, you lock up your deposit for a certain period of time—typically anywhere from three months to five years—and you get paid an interest rate that’s typically higher than savings and money market accounts for longer-term CDs. But there’s also an early withdrawal penalty. These may be best to help you meet specific time-based savings goals.
In addition, you can also invest in Treasury securities. These are short-term to long-term debt instruments issued by the federal government. Because they are backed by the full faith of the U.S. government, they are considered some of the safest investments around.
Here are some of your options.
Treasury bonds: T-bonds are long-term bonds that pay a fixed interest rate every six months for 20 or 30 years.
Treasury notes: T-notes also pay interest every six months. You can purchase T-notes in two-, three-, five-, seven-, and 10-year terms.
Treasury bills: You purchase T-bills at a discount to their face value. When the bond matures, you get the note’s face value. The difference is basically your interest payment. T-bills come with maturities of four, eight, 13, 17, 26, and 52 weeks.
Keep Saving for Retirement
Even during high inflationary periods, it’s important to save as much as you can for retirement. If you have an employer-sponsored retirement plan such as a 401(k), you could already be on the right track. A 401(k) has a contribution limit of up to $23,500 plus an extra $7,500 if you’re 50 or older.
But don’t worry if you don’t have access to a workplace retirement plan. You can also open a traditional or Roth IRA through a brokerage firm or bank. The process should only take a few minutes.
Traditional IRA: You make tax-deductible contributions to a traditional IRA. This means they could lower your tax bill or increase your refund for the year.
Roth IRA: These are funded with after-tax dollars. So you can’t deduct contributions. But withdrawals are tax-free as long as you’re at least 59.5 years old and the account has been open for at least five years.
The Bottom Line
Whether U.S. tariffs will lead to more inflation is yet to be seen. However, there are steps you can take if you notice prices increasing everywhere. You can revisit your budget, boost your emergency fund, and invest in tax-advantaged retirement plans.
The Epoch Times copyright © 2025. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
