As trade tensions between the U.S. and China heat up, expect to pay for it at the cash register.
“Every time this trade war escalates, the risk to U.S. consumers grows,” Matthew Shay, president and CEO of the National Retail Federation, said in a statement. "With these latest tariffs, many hardworking Americans will soon wonder why their shopping bills are higher and their budgets feel stretched."
Shay also called tariffs "a tax on American families."
President Donald Trump escalated a trade war with China on Monday by slapping 10 percent duties on $200 billion of Chinese products. The levies will rise to 25 percent at the end of the year. Beijing said Tuesday it will retaliate by putting tariffs on $60 billion worth of U.S. goods next week.
As of the latest tally, the tariffs will mean higher prices on things like frozen orange juice, shampoo, peanut butter and tools.
In tweets, the president has argued that pushing trading partners will result in new deals that are more favorable to the U.S.
Commerce Secretary insisted on CNBC on Tuesday that "nobody is going to actually notice [price increases] at the end of the day" because the hikes will be "spread across thousands and thousands of products."
Michael Salerno, lead director of global banking at First National Bank of Omaha, said U.S. companies must attempt to absorb the higher costs on imported goods, which could translate into “higher prices at the register around the holiday season.”
“At a time where wage growth has been pretty limited, every dollar counts and price inflation means fewer dollars consumers have left to spend somewhere else,” said Greg McBride, chief financial analyst for Bankrate.com.
Price inflation will also take a toll on consumer confidence, he added, even though Americans now feel more optimistic about their economic prospects than they have in a long time.
“The widespread instance of tariffs is something that could become a headwind to the economy,” McBride said.
A quarter of registered voters think raising tariffs will do more to protect American jobs and help the U.S. economy, according to an NBC News/Wall Street Journal poll in July. On the flipside, about half of registered voters said duties will do more to raise the costs of goods or hurt the economy.
"Achieving better trade deals is an important priority, but there is nothing better about it when American families are forced to pay higher prices for everyday purchases," said the NRF's Shay.
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