Donald Trump's tariffs could push up price of iPhones but lead to cheaper mortgages

The mayhem unleashed by Donald Trump’s latest wave of trade tariffs is showing no sign of easing.

And the longer it goes on, the more chance it has of hitting millions of ordinary people in the pocket. For while it might seem that decisions made in the White House are remote from everyday life for many, the reality is that they have huge consequences, from the cost of a mortgage to the latest .

Here is how you might be impacted.

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Pensions

The stock market volatility is having an impact on millions of UK workers, even if they don’t realise it. That is because it affects the value of workplace , or at least the element that is invested in stocks and shares.

The amount will depend on what pension fund workers have, and the extent to which they are exposed to equities. It is often the case that the younger workers are, the greater their exposure, but also the longer they have to claw back any losses. The dominance of US markets also means that what happens on Wall Street feeds through to the value of workers’ pension pots here.

With global stock markets having shed around 10% of their value since President Trump took office in mid-February, it means pension savers could be sitting on a chunky paper loss. For a UK worker with a £35,000 pension pot, that means around £3,500 knocked off the value of their retirement fund. In reality, not all their fund will be invested in stock and shares, but experts say it gives an indication of the impact.

Mortgages

There could be a silver lining for mortgage borrowers as a result of ’s tariff turmoil. That is because many fear the economy will take a hit from such huge disruption to global trade, which the UK will be caught up in. If that were to happen then the Bank of England will come under pressure to cut interest rates again, although it will depends on what happens to inflation as well. Financial markets now expect three interest rate cuts from the Bank this year. With its base rate at 4.50%, that could mean it coming down to 3.75%.

And falling interest rate expectations should feed through into cheaper mortgages, something that would be welcomed by hundreds of thousands of borrowers coming off cheaper home loans over the coming months and needing to bag a new deal.

Laith Khalaf, head of investment analysis at AJ Bell, said: “Interest rate expectations are falling as markets price in the potential economic damage from US tariffs, and the likelihood the Bank of England will respond with interest rate cuts. The market had been pricing in two interest rate cuts this year, but in short order that has now been ratcheted up to three.”

The two year swap rate - which influences the cost of fixed rate mortgage over the same period - has fallen from 4% on April 1 to 3.7% at the end of last week, according to Bank of England data. “We may therefore see falling interest rates feeding into mortgage pricing before too long,” said Mr Khalaf.

Savings

While borrowers will be hoping for a cut in interest rates, savers won’t be counting down the days. A period of higher interest rates has benefitted the nation’s army of savers, who have been able to bag some decent returns for once. In reality, many savers are also borrowers, so the movement in rates can impact them in both ways.

Cost of goods

The most talked about impact of Donald Trump’s tariffs has been on the cost of goods to the US, and consumers in the States. While the President is keen to play down the risk of levies on imports pushing up inflation, it seems inevitable that will happen.

What is far less certain is whether tariffs on US goods will somehow lead to higher prices elsewhere, including the UK. However, experts fear that as companies experience higher costs - or a hit to sales - they will try to recover it by putting up prices wherever possible.

Take tech giant Apple, for example, whose big selling iPhones are made in and which are now subject to hefty tariffs when those handsets are imported back to the States. Some experts believe it could drive up the cost of the latest iPhones in the US by 30% or 40%, to as much as £1,700.

The same could be true of laptops, TVs and other gadgets through to clothing and elsewhere.

Kevin O’Marah, co-founder and chief research officer at Zero100, a supply chain intelligence specialist, said: “There will be a dissipation of the costs.” He also warned the massive upheaval to global supply chains would add to the impact. “Tariffs will increase prices across the board,” said Mr O’Marah. “Upstream costs will rise and companies will have no choice but to pass them along. Once big retailers start raising prices, others will follow. The herd effect will kick in. It will be easy to see the impact on a household budget.”

Motorists

One knock-on impact of tariffs has been concerns that the sudden barriers to trade will dent the already weak global economy. And a weak economy consumes less oil, hence why oil prices have fallen sharply.

Lower oil prices have two obvious consequences. The first is that it should lead to cheaper petrol and diesel prices, the longer it goes on, and as long as retailers pass on any savings. The second is that the price of oil feeds through to many firms’ costs, in one way or another. If oil continues to fall that will put downward pressure on inflation. And any easing of inflation - if the economy weakens too - opens the way for a Bank of England rate cut.