Many American consumers have struggled to catch up after the COVID-19 pandemic and the stubborn inflation that followed, and experts say tariffs could add to their financial troubles.

President Donald Trump has imposed a global 10% tariff on all imports into the U.S. and additional tariffs on some of the country’s closest trading partners. Economists widely believe the tariffs will increase costs for American consumers and will drag down economic growth. Consumers seem to agree.

In a recent consumer-based survey from J.D. Power, a data analytics and consumer intelligence company, almost 6 in 10 American consumers say they are somewhat stressed about their overall financial situation, and 53% said their stress has gone up in the past month.

About half said they will buy fewer non-essential items and major purchases over the next year. Additionally, the majority of Americans said the U.S. is already or is very likely to experience a recession in 2025, and that tariffs will increase inflation.

Investopedia talked to Jim Miller, vice president and general manager of financial services at J.D. Power, about consumers’ attitudes and how they can adjust their budgets to prepare for tariffs. The interview has been edited for brevity and clarity.

INVESTOPEDIA: What is the general attitude of consumers about the current economy?

JIM MILLER: There’s a high level of anxiety. I would say consumers are very concerned about prices still, and the number one concern is about the price of food and everyday items. So I guess that’s all the talk about eggs and such. So, just heightened sensitivity after recent inflation, they’re expecting that inflation will increase from where it’s at.

INVESTOPEDIA: How are they preparing for potential tariff-related economic turmoil?

MILLER: We asked about what they will do during the so-called ‘pause,’ or while tariffs are being figured out. The number one was 41% said they’re going to start cutting back on spending until there’s more clarity.

Now, the flip side of that is 27% said that they would stock up on everyday items before the price goes up. So it’s kind of similar in cutting back on spending, but maybe a little bit of that is offset by a short-term surge in buying those things that you expect to go up in price.

INVESTOPEDIA: What are your recommendations on how consumers can prepare for increased prices from tariffs?

MILLER: We’ve been going through five-plus years of challenges between the pandemic and then inflation, so this is another shock to consumers. One of the things we see is that roughly half of consumers are living paycheck to paycheck or falling behind… Generally, about 45% of consumers are financially healthy. That kind of varies a little bit, and that’s similar to what we saw here. 

If you’re not financially healthy already, this is just another challenge that you have to overcome. So I mean, a lot of it is the basics: having a budget, following a budget, making sure that you’re putting money aside for an unexpected expense.

Trying to create that financial buffer in your life, which I know is not easy, but that becomes really more critical as we go through these periods of turmoil.

INVESTOPEDIA: How can consumers build up that financial buffer quicker?

MILLER: If you do have some money already put aside, where you have it is very important. Many of the large banks, with savings accounts, are still fairly close to zero. You can find more than 3% in some cases, 4%, elsewhere, if you shop around. So, looking for that high-rate, high-yield savings account is a good move if you have money. 

The other thing is to use budget tools. So many banks and financial institutions offer those to their clients. We still see relatively low adoption of those tools, but we do see that when consumers start using budgeting tools, it helps their personal financial situation. They become more satisfied with their bank as well.

INVESTOPEDIA: What are your recommendations on how consumers who are still in a financially healthy place can stay there amidst tariff turmoil?

MILLER: One is making sure that you’re staying in that category, and it seems that many of them are already putting off major purchases. Drive your car a little bit longer until things settle down. Depending on where they are within that, they may have money in the market, and it’s a challenging time. The best time to have made a change would have been two or three months ago, and we’ve all felt the pain since that point.

One thing is to just minimize the stress. Don’t look at your 401(k) every day to see if it’s really in there for your retirement — unless you’re close to retirement. Keep with your … strategy going in. The market has always rebounded. It just depends on how long it takes. So, stay the course.