Jamie Spencer
With new U.S. tariffs set to take effect, American consumers are growing increasingly concerned about rising prices and economic uncertainty. President Donald Trump’s proposed 25% tariffs on products from Canada and Mexico, scheduled to start on March 4, are fueling fears of higher costs for everyday goods.
Tariff Fears Lead to ‘Doom Spending’
A recent report by CreditCards.com revealed that 19% of U.S. adults are engaging in “doom spending” — making impulsive purchases driven by fear and anxiety about future price increases. The trend reflects heightened consumer concerns as tariffs threaten to raise the cost of essential items.
“It’s too soon to say precisely how the new tariffs imposed by President Trump are affecting consumer spending,” said John Egan, a personal finance expert at CreditCards.com. “However, they very well could cause some consumers to rethink their buying habits, especially when it comes to major purchases.”
Preemptive Buying and Stockpiling
In anticipation of higher prices, 28% of Americans have already made large purchases, such as home appliances or home improvement supplies. Additionally, 22% are stockpiling non-perishable food, toilet paper, and over-the-counter medications to prepare for potential shortages or price hikes.
However, these spending habits are leading to increased debt. The report found that 34% of credit card borrowers are accumulating more debt this year due to impulsive buying. CreditCards.com conducted the survey with 2,000 adults in February, highlighting a growing trend of panic-driven spending.
Downside of Doom Spending: Rising Debt and Budget Strain
Financial experts warn that doom spending can strain household budgets and lead to mounting credit card debt. John Egan cautioned, “One of the drawbacks of doom spending is that it could prompt you to overspend and strain your budget. It might also lead to piling up credit card debt, which could put you in a financial hole due to interest charges and fees.”
With credit card debt in the U.S. exceeding $1.21 trillion, financial advisors emphasize the importance of paying down debt rather than accumulating more through impulsive purchases.
Financial Advice Amid Economic Uncertainty
Matt Schulz, chief credit analyst at LendingTree and author of “Ask Questions, Save Money, Make More,” emphasized the importance of financial preparedness amid economic uncertainty. “Anyone who tells you they know what the next few months hold for the economy is just speculating,” Schulz said.
He advised consumers to focus on two key financial strategies: paying down high-interest debt and building an emergency fund. “Both are easier said than done, for sure, but both will put you in a better position to handle whatever situations come your way,” Schulz explained.
By managing debt and building savings, consumers can protect themselves from future financial shocks, even as economic uncertainty persists.
Conclusion: Navigating Economic Anxiety and Tariff Fears
The impending U.S. tariffs and rising economic uncertainty are driving a wave of doom spending among American consumers. While stocking up on essentials may provide short-term reassurance, financial experts caution against impulsive purchases that can lead to long-term debt.
By prioritizing debt reduction and emergency savings, consumers can navigate the current economic landscape with greater financial security. As the impact of Trump’s tariffs unfolds, staying financially disciplined will be key to weathering potential price hikes and economic volatility.
