There were two items from this week that could have an impact on consumers; the proposed 20% tariff on goods imported from Mexico and President Trump pulling the remaining Affordable Healthcare Ads for the last week of open enrollment.
What does this have to do with you?
The proposed tariff on Mexican imports could be a cause for concern. The President claims the tariff would be used to pay for the border wall that would separate the United States and Mexico. There could be some collateral damage with this tax, however. The cost of a tariff, no matter which way you slice it, is passed down to consumers. If goods are taxed, companies and organizations will increase prices to protect their profits and their bottom line. Goods imported from Mexico directly to the consumer, and goods companies import to create their products, could see price increases.
Mexico, is the United States 3rd largest supplier of imported goods. The breakdown of those goods are listed below:
- Vehicles - $74 billion
- Electrical Machinery - $63 billion
- Machinery - $49 billion
- Agricultural Products - $21 billion
The industries and products listed above could see a price increase, but we will have to see if the 20% tariff is actually implemented.
The new administration pulling the remaining ACA ads is a sign that change to the ACA is imminent. President Trump and the GOP have already started the process for repealing “Obamacare,” and a plan to replace it is being worked on, but no specifics have been released.
However, there are a few items the President stressed will be in the new health care system. Those items are listed below:
- Subsidies could be removed
- Removal of penalty for not having insurance
- Decreased Federal spending in Medicaid
- Continued coverage of pre-existing conditions
The removal of subsidies could hurt people who earn little to no income, but the removal of penalties for not having coverage will help those that are in good health and don’t foresee many medical bills in their near future. Reducing Federal Medicaid spending would give more power to the states, but could affect the number of people covered under the plan. Continued coverage of pre-existing conditions will help those that have chronic illnesses, such as diabetes.
While no tariff or health insurance replacement has been put in place, the proposed plans could have a significant effect on the country. Over the next few weeks to months, the President and the Federal Government will work to provide plans to help the people. Pay attention to the news and if changes are made, talk to a tax, financial, and/or insurance professional to plan ahead for changes.
Facts and figures from www.ustr.gov