Parents are ‘hunkering down financially’ to brace for Trump tariff impact

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American families are cutting back on summer camps and vacations and delaying major purchases as they prepare to weather a trade war

Parents around the country — who were stretched financially even before sweeping new tariffs were implemented — are bracing for the financial impact of a trade war. Photo: MarketWatch photo illustration/iStockphoto

Written by Venessa Wong - MarketWatch

Published April 17, 2025 9:42 a.m. ET

Jamie Bunnell started tightening her family’s budget once President Donald Trump’s first wave of tariffs went into effect. The business forecast at her husband’s employer, which manufactures aluminum and glass products, turned negative due to tariffs on imported materials — a concerning shift because his income supports not only the couple and their youngest child, who is 11, but also his parents.

The five of them live together in Las Vegas, and Bunnell, a nurse, left the workforce four years ago to help care for her father-in-law. On top of her husband’s job security, they worry about whether the cost of her father-in-law’s prescription medication will go up in the event of tariffs on pharmaceuticals or cuts to Medicare.

It’s “terrifying,” Bunnell told MarketWatch. “We’re not buying any extra stuff. We’ve already had the conversation with the kids and family members to not count on vacations. No summer camps. We’re going to be doing stuff at home that is more economically friendly, like hiking. … We’re really hunkering down financially.”

Parents around the country — who had been reporting high levels of financial stress, including higher levels of credit-card debt, even before Trump announced sweeping global tariffs — are bracing for the financial impact of a trade war.

With economists widely expecting increased prices for American consumers and forecasting a higher probability of the U.S. economy tipping into a recession this year, parents told MarketWatch they expect to reduce their discretionary spending, including on a wide range of imported baby and children’s products, by either using secondhand goods or simply buying less. Others are cutting back on vacations and other activities to boost their financial reserves in case of job loss or a reduction in income as a result of an economic downturn.

As working Americans continue to curb their discretionary spending after years of higher-than-normal inflation — and now tariffs — some are expressing disappointment with the compromises they must make to get by in today’s uneven economy.

Earlier this month, Democratic lawmakers sent a letter to Commerce Secretary Howard Lutnick asking for child products like car seats, highchairs, strollers and cribs to be exempted from costly tariffs. They noted that families with babies and toddlers spend around $20,000 in a child’s first year alone, including nearly $1,000 on infant-safety gear, and that “tariffs will force families to pay even more to purchase these products, which are essential to care for young children and keep them safe.”

“This could not be more anti-family policy,” Rep. Kelly Morrison, a Minnesota Democrat and one of the leaders of the effort to exclude infant-safety products, told MarketWatch.

Tariffs will also drive up grocery prices, and with proposed budget cuts to Medicaid and education, “this is just an additional burden on new and young families that they’re just not going to be able to tolerate,” Morrison added. “We’re making it harder for Americans to have babies and raise families.”

The Juvenile Products Manufacturers Association said in a statement that if parents must use secondhand gear due to affordability issues, they should check the Consumer Product Safety Commission website to make sure a product hasn’t been recalled and should check that the original parts are all there. Parents can call the manufacturer’s customer-service line for replacement parts, instructions or labels.

Putting big purchases on hold and preparing for a smaller bonus

Scooter Thomas, a financial planner with Savant Wealth in Birmingham, Ala., and his wife have a 2-year-old and are expecting their second child in July.

As consumers — primarily high-income shoppers, surveys show — stockpiled some products ahead of tariffs taking effect, retail sales surged 1.4% in March. While Thomas said he would never recommend that people panic-buy products they don’t need just to get ahead of tariffs, he noted that there is some “stuff that you know you’re going to need” for a baby: strollers, cribs and clothing, for example.

“If you’re worried about it, and it’s a necessity and you have the money, go do it,” Thomas said. “Take the worry off your plate.”

Still, as he and his wife prepare for the arrival of their baby, he said some nice-to-have items on their list will have to wait. “I’d love a new TV for our den,” he said, but that purchase will be put on hold. He also would like to upgrade his 10-year-old truck, but with automobile tariffs driving up the price of cars, he said, “that’s just not going to happen.” It’s estimated that new-car prices will rise by $5,000 to $15,000 due to tariffs.

Carla Adams, a financial planner with Ametrine Wealth in Michigan and parent to a 5-year-old and a 7-year-old, told MarketWatch her husband is concerned about how tariffs will affect his job at a company that sells designer car wheels, some of which are made in China. “We think his job is secure,” she said, but they are preparing for smaller or no bonuses this year.

To trim spending, Adams is keeping hand-me-down clothes from her sister’s kids. This summer, she and her husband will rent a smaller vacation home and split the cost with friends, while in previous years they had the budget to pay for a larger rental on their own and even host some guests.

“I hope that this is going to be a short-term thing … and that the squeeze will be temporary, but time will only tell,” she said.

How families can prepare for higher prices

To help families navigate these uncertain times, Juan HernandezAriano, a financial planner at Wealth Create, asks clients who are parents to create a ranking of their financial priorities and then review their purchase histories to create a list of their largest spending categories.

“Very often, you see a disconnect,” he told MarketWatch. None of these clients have said that eating out and shopping — whether at Amazon, Walmart, Temu or the dollar store — are priorities, even though these categories make up as much as 60% of their monthly spending.

“When you’re looking at the expenses and comparing them to your goals, it’s much easier for families to compromise and to commit to reducing a few things,” HernandezAriano said.

A recent Ameriprise survey found that saving for retirement (59%), paying for children’s education (39%) and managing day-to-day living expenses (36%) were parents’ top goals. However, almost three-quarters of parents said they experienced guilt, which many said led to overspending, including on technology and toys.

“There have always been periods of volatility,” Deana Healy, vice president of financial planning and advice at Ameriprise, told MarketWatch. In times like these, “it’s even more important [for families] to have open, honest conversations about what’s important to them. Where do they want to prioritize their time and their money to make smart long-term decisions?”

Even for families who are not yet feeling the impact of tariffs, HernandezAriano recommends going through the process of ranking financial priorities and spending and identifying areas they are willing to trim, if they have not done so already.

“What we have right now is a crisis of anxiety because of the uncertainty,” HernandezAriano said. “If you can start now, then by the time [higher prices] actually start to show up, then parents will know how to react, and they’ll be more confident that they can manage it.”

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About the author

Venessa Wong

Venessa Wong is a personal finance reporter for MarketWatch based in New York City. She previously covered business, inequality and culture during her tenure at BuzzFeed News, and reported on the food industry for Bloomberg. Venessa is a graduate of the Columbia Journalism School and Middlebury College. Follow her on Twitter @venessawong.