Tariff Cost Could Eat Your Bigger Tax Refund 3/12/26

Summary

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Your Money Minute – “Tariff Cost Could Eat Your Bigger Tax Refund” (March 12, 2026)

Episode Overview:
Hosted by Jessica Ettinger, this quick episode of CNBC’s Your Money Minute unpacks why many Americans are set to receive higher tax refunds this year—and why new tariffs may cancel out that good news. Featuring insight from JP Morgan’s Chris Horvor and The Tax Foundation’s Daniel Bunn, the episode examines how consumer behavior and tariffs interact to shape household finances in Spring 2026.

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Main Theme

• Headline: Bigger tax refunds are on the way for Americans in 2026, but rising Trump-era tariffs are likely to offset the financial benefit.
• Purpose: To help listeners understand how these two financial developments—refund increases and tariff-driven price hikes—will likely leave household budgets unchanged.

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Key Discussion Points & Insights

1. Expected Bigger Tax Refunds

• Jessica Ettinger (00:00): Shares the news that Americans are receiving larger tax refunds this year compared to previous years.
• Discussion:
  • “Americans are getting bigger tax refunds this year than in previous years and businesses, we're hoping they're going to spend that.”
    — Jessica Ettinger, 00:00

2. Consumer Spending Habits

• Insight from JP Morgan’s Chris Horvor:
  • Historical Behavior vs. New Survey Data
    • Walmart surveys say Americans plan to save more of their refunds.
    • History suggests otherwise: when consumers receive “free money,” they tend to spend it.
  • Quote:
    • "If you look back over the history of the consumer in the US they get free money, they spend that money."
      — Chris Horvor, JP Morgan, 00:21
    • “Walmart surveys indicate that it's more is going to be dedicated to savings, but historical behavior would tell you otherwise.”
      — Chris Horvor, 00:12

3. Tariffs Offset Tax Refund Gains

• Jessica Ettinger (00:27): Warns that while the refunds are larger, Trump-era tariffs are raising prices by a similar amount.

  • Key Point: The extra $1,000 in average refunds could be entirely eaten up by the increased cost of goods due to tariffs.
  • “The Trump tariffs are sending prices just about that much higher. So it's just about a wash.” — Jessica Ettinger, 00:27

• Daniel Bunn (The Tax Foundation) adds:

  • “People are going to see their tax refunds an average of $1,000 higher, but the tariffs are moving in the exact opposite direction. The tariffs are eating directly into that and that could go up to $1,300 that the tariffs are eating into American household spending.”
    — Daniel Bunn, 00:38

4. Conclusion & Resource

• Jessica Ettinger (00:53): Directs listeners to find out more about taxes and tariffs at CNBC, noting the ongoing impact and the importance of staying informed.

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Notable Quotes & Memorable Moments

• “Americans are getting bigger tax refunds this year than in previous years...” (Jessica Ettinger, 00:00)
• “If you look back over the history of the consumer in the US they get free money, they spend that money.” (Chris Horvor, 00:21)
• “The Trump tariffs are sending prices just about that much higher. So it's just about a wash.” (Jessica Ettinger, 00:27)
• “The tariffs are eating directly into that and that could go up to $1,300 that the tariffs are eating into American household spending.” (Daniel Bunn, 00:38)

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Timestamps for Important Segments

• 00:00: Bigger tax refunds this year, expectations from businesses
• 00:12: Walmart surveys vs. historical behavior on spending vs. saving
• 00:21: Chris Horvor on American consumer habits
• 00:27: Tariffs’ impact on prices and refunds
• 00:38: Daniel Bunn quantifies the effect—tariffs could outweigh refund gains
• 00:53: Where to find more information about taxes and tariffs

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Summary Takeaway

Despite promising headlines about higher tax refunds in 2026, most Americans shouldn’t expect extra money in their pockets—tariff-driven price increases will likely cancel out the gains. Both expert guests emphasize that positive news on refunds is being offset point-for-point by policy changes affecting household spending, making it more important than ever for consumers to watch both sides of their financial ledger.

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Transcript

[A]

With a CNBC you Money minute. I'm Jessica Ettinger. Americans are getting bigger tax refunds this year than in previous years and businesses, we're hoping they're going to spend that.

[B]

Walmart surveys indicate that it's more is going to be dedicated to savings, but historical behavior would tell you otherwise.

[A]

That's JP Morgan's Chris Horvor's on cnbc.

[B]

If you look back over the history of the consumer in the US they get free money, they spend that money.

[A]

But here's a surprise about your bigger tax refund for this spring. The Trump tariffs are sending prices just about that much higher. So it's just about a wash. People

[B]

are going to see their tax refunds an average of $1,000 higher, but the tariffs are moving in the exact opposite direction. The tariffs are eating directly into that and that could go up to 1300 that the tariffs are eating into American household spending.

[A]

The Tax Foundation's Daniel Bunn on CNBC keep taxes and [e-mail] I'm Jessica Ettinger CNBC.

[C]

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