Americans love to buy stuff. Whether it’s fast fashion from Temu, party favors from Dollar Tree or the latest Amazon must-haves, many in the U.S. consume a lot of products, which is good for the economy. It generates jobs, promotes social mobility, and helps the overall growth and stability of the economy.
But when goods cost too much, consumers stop spending and the economy can shift, which is the fear many have over President Donald Trump’s tariffs.
Trump has announced many tariffs, causing disruptions to the market, which is wiping out retirement accounts for many and sending retirees into a panic, NBC News reported. And many are concerned these tariffs will result in higher prices for many goods.
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Cheap goods, according to money expert Andrew Lokenauth, are part of what makes the American Dream possible. Read on for more details about cheap goods and the American Dream, as well as how tariffs could impact them.
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Are Cheap Goods Part of the American Dream?
The American Dream was built on the idea that anyone could work hard and access a better life — and much of that better life was defined by the ability to own things.
“After WWII, I saw how the U.S. government deliberately showcased affordable appliances, cars and TVs as propaganda to promote capitalism,” Lokenauth explained. “Those exhibitions in Europe shaped our own self-image too.”
Cheap goods became woven into our national identity when middle-class families had access to things that were once considered unattainable because of their high costs.
“A factory worker could buy a TV for their family — something unthinkable in most other countries,” Lokenauth said. “That ability to purchase comfort items, regardless of social class, became a defining feature of American prosperity.”
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How Tariffs Could Impact the American Dream
Experts are estimating price increases for many items due to tariffs. For example, according to the Center for American Progress, a $31,395 SUV made in Mexico could eventually cost $39,244 due to tariffs. It also cited price increases for groceries, household necessities, auto parts, clothing and recreational items.
More expensive goods could compromise the core promise of upward mobility.
“Last month, I spoke with families in Michigan who are already stretching budgets to afford basics. Higher prices mean fewer opportunities to save for education, homeownership or retirement — the traditional pillars of middle-class stability,” Lokenauth said. “The math is brutal: If a family spends $800 more per year on household goods due to tariffs, that’s $800 less for their American Dream. The typical family has about $5K in savings. These price increases eat away at their ability to get ahead.”
Could Tariffs Make the American Dream More Achievable?
Many believe cheap goods help fulfill the American Dream, but Treasury Secretary Scott Bessent has a different view.
“Access to cheap goods is not the essence of the American Dream,” he said at a meeting of the Economic Club of New York. “The American Dream is rooted in the concept that any citizen can achieve prosperity, upward mobility, and economic security.”
Bessent explained that the tariffs are designed to level the playing field and ensure there are fair trade practices that will benefit Americans. However, the tariffs could have other consequences as well.
“The administration seems to be gambling that voters will accept short-term pain for theoretical long-term gains in domestic manufacturing,” Lokenauth said. “From studying similar policies historically, I’m skeptical this tradeoff will work.”
What Could Happen to the American Dream?
If the prices of everyday household items and basics become unaffordable, Lokenauth said he doesn’t see how the American Dream can survive long term.
“Consumer spending drives roughly 70% of GDP,” he said. “The current system relies on people being able to buy things to create economic growth and opportunity.”
If this current system is impacted by tariffs or something else, things could be disrupted. “Based on historical precedent, taking away affordable goods without offering a compelling alternative vision risks severe economic and social disruption. The American Dream might survive — but it would need to become something very different than what it’s been for the past 75 years,” Lokenauth said.
Ultimately, it remains to be seen what will result from tariffs, as the Trump administration has issued a pause on reciprocal tariffs and introduced some exceptions. But if goods do get more expensive and stay that way, the American Dream could be affected.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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Sources
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NBC News, “Retirees ‘stunned’ as market turmoil over tariffs shrinks their 401(k)s.”
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Andrew Lokenauth, AndrewLokenauth.com
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Center for American Progress, “Examples of Potential Consumer Price Hikes Under Trump’s Tariffs.”
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U.S. Department of the Treasury, “Treasury Secretary Scott Bessent Remarks at the Economic Club of New York.”
This article originally appeared on GOBankingRates.com: How Cheap Goods Make the American Dream Possible
