Saving up for your first car? To buy new threads for the job you just landed? Or even to furnish your apartment, condo, or first house? Get ready for these goals to get a little further out of reach.
Congress is considering a trillion-dollar border adjustment tax (BAT), a consumer tax which would add a 20 percent tax to all imported goods. CNBC is reporting that the BAT consumer tax will have negative consequences for several businesses, and many of Millennials’ favorite retailers will be among the hardest hit.
- Gap, Urban Outfitters, Fossil, and American Eagle are some of the most at-risk retailers because many of these brands import nearly 100 percent of their products to sell domestically.
- The average prices of Toyota and Ford, whose cars are considered among the best for Millennials, will rise by $2,600 and $282 respectively.
- Analysts predict Abercrombie & Fitch will see earnings drop by a whopping 132 percent.
- Under Armor is forecasted to lose 40 percent of its earnings.
Retailers will respond by shifting the cost to consumers. Ledbury told CNBC it is deciding between raising prices or cutting workers’ hours.
Overall, the National Retail Federation reports the BAT consumer tax could cost households an estimated $1,700 in higher prices for everyday goods in the first year alone.
Young adults will be hit particularly hard by increases in costs of everyday necessities, leaving them with less disposable income to achieve those financial goals that will help them get a foothold in life.