Categories With Already-Elevated Price Sensitivity Face the Highest Tariff Opposition

Views on tariffs are split along party lines, with Republicans more likely to support various policy proposals put forward by President Trump and Democrats more resistant. Concerns about impacts on household finances, inflation and the economy overall are likewise split. However, consumers overall tend to believe tariffs have a negative impact on consumers, and that the proposed policies will make inflation worse–and by a more substantial degree than the last time tariffs were implemented in 2018.

Recent inflation experience heading into 2025 is starkly different than it was the last time tariffs were implemented

The expected magnitude of the price increases from potential 2025 tariffs is not the only difference compared with the 2018 tariff implementation. The current economic backdrop–and specifically, consumers’ recent experience with inflation over the past few years–has shifted substantially as well. From the beginning of 2018 to November 2024, consumer prices increased a total of 27.2%. Price growth was substantially lower in the period preceding the 2018 tariffs, with the cost of living increasing just 11.7% over the same length of time through December 2017. 

Persistently elevated inflation has left a deeply-felt mark on consumers, who remain highly price-conscious even as the pace of price growth has slowed. Despite roughly similar levels of major economic indicators like unemployment, GDP, and real income and spending growth in 2024 and 2018, overall consumer sentiment as measured by Morning Consult’s daily index remains much lower than it was in 2018. A key driver of this discrepancy is the Current Buying Conditions component, which was 22.4 points lower on December 17th, 2024 than at the beginning of 2018. The component tracks whether consumers think it is a good or bad time to make a major purchase, with cost concerns playing a major role in shaping these views. 

The depleted level of sentiment surrounding the buying environment in 2024 relative to 2018 is indicative of a consumer base whose tolerance for inflation has been pushed to its limits; U.S. adults are heading into 2025 primed to be bothered by price increases.

Tariff opposition is not uniform across categories

In addition to measures of general sentiment around purchasing conditions, Morning Consult seeks to track how consumers are shifting their buying behavior in response to prices in a quantifiable way. One such metric, the Price Sensitivity index, which measures the prevalence of prospective buyers declining to purchase goods and services due to higher than expected prices, has increased as the cost of living continued to rise at an elevated pace since tracking began in early 2022. Cooler inflation lately has not been enough to reverse the upward trend as the cumulative change in price levels continues to bother U.S. consumers. 

However, trajectories in price sensitivity vary by category, with some goods and services facing sharper consumer pushback against price increases than others. Looking ahead to the potential impact of tariffs, most consumers believe these costs would be passed on to their households. Notably, across a range of goods potentially subject to higher tariffs in 2025, larger increases in price sensitivity over the past two years were strongly correlated (.90) with net opposition to raising tariffs on those same products.

Categories like groceries, home repair supplies and paper goods were among the most likely to elicit resistance to potential tariff additions. Food in particular is a staple category that consumers cannot avoid buying, despite rising costs. It is also a category for which cumulative price growth has been very high over the past few years. In fact, total price growth from the average level in 2018–the last time tariffs were implemented–to November 2024 was positively correlated (.70) with net tariff-increase opposition across categories. The more price levels have risen in recent memory, and the more critical a given product is to everyday household function, the more price sensitivity has risen–and, consequently, disinclination to support raising tariffs on those goods. 

While all products listed in Morning Consult’s survey had more respondents opposed than in favor of adding tariffs, large durable goods like new vehicles, exercise equipment or electronics had relatively lower net opposition. Many of these categories are not purchased as frequently, so respondents may feel they have more flexibility to avoid potential cost increases. 

Lower and middle income consumers are more likely to oppose tariffs

Tariff opposition levels across categories are also influenced in part by household financial situations, such as income level. The inflation experience affected all U.S. consumers to a degree, but some were more severely impacted than others. Price sensitivity among those from households earning less than $50,000 per year has persistently been higher than that of high earners ($100,000 or annual more household income) since tracking began in 2022. The middle income group ($50,000 to $99,999 annual household income) initially resembled high earners more closely in terms of their purchasing response to inflation, but attitudes have deteriorated since 2023, with price sensitivity climbing rapidly over the past year for this cohort. 

When it comes to the prospect of adding tariffs–and the associated cost increases for various household goods–attitudes across income groups align with their differing degrees of pre-existing dissatisfaction with price levels. High earners, who have been generally more willing to absorb price increases, have the weakest opposition to tariffs–even rising to net support for certain products. Lower and middle earners–the latter of whom had the largest net increase in price sensitivity since 2022–are more inclined to resist the idea of adding tariffs to household goods. 

Inflation environment facing risks even beyond tariffs

Even without the influence of potential policy moves like tariffs coming in 2025, other recent developments in the economy suggest inflation could remain stubbornly high. On the goods side, firmer supply chain pressures and robust consumer demand may reverse some of the downside pressure these categories have been exerting on inflation during the recent cooling period. Wage growth for services categories has picked up over the second half of 2024, a potential cost pressure businesses may feel inclined to pass on to consumers with price increases. Housing price growth has slowed from its peak, but chronically limited home supply relative to demand across much of the country looks unlikely to yield near-term price relief. On top of these factors, consumer demand appears to be improving as unemployment remains low and sentiment picks up, and may be further helped by lower interest rates. Taken together, inflation risk appears to be gathering on the upside heading into 2025 even without tariffs, setting up already cost-conscious consumers for yet another stretch of price-dominated buying decisions.