President Donald Trump increased tariffs on $200 billion worth of Chinese products from 10% to 25% as trade talks broke down and has threatened to levy 25% tariffs on an additional $325 billion worth of goods that are not taxed.
The president tweeted that the tariffs "have had little impact on product cost, mostly borne by China," and that they will make the U.S. "much stronger." But experts, including White House economics advisor Larry Kudlow, say U.S. consumers can expect to take a hit.
A report from Tariffs Hurt the Heartland, a bipartisan campaign against the levies, found that increasing duties on Chinese goods to 25% would cost a U.S. family of four $767 annually and could lead to a loss of over 934,000 jobs.
If the U.S. imposes a 25% tariff on all Chinese imports, as the president has threatened, the average family could expect to pay $2,294 more annually for goods, according to the report, which also takes into account the tariffs on steel and aluminum imports and assumes China would retaliate.
Nearly 6,000 products will be affected by the tariff increases, and you can find a detailed list of them here. The extent to which you would be affected depends on how much of, and how often, you buy these items.
Here are some examples of products whose prices you can expect to go up, according to the NRF:
Tariffs on furniture and travel goods from China alone would cost Americans $6 billion a year, an NRF analysis found. Gold says it could take weeks or months for consumers to feel the full impact of the increased costs, though some increases will be immediate.
Tariffs are taxes on imported goods. U.S. consumers will likely end up paying more because U.S. importers will pass on some of their increased costs.
In theory, tariffs encourage U.S. companies to use domestic suppliers and labor to make products because foreign products have become more expensive. But that isn't always how it works. Companies often lay off employees or increase prices to recoup some of the costs on their end.
When Trump initiated his tariff policy, the Trade Partnership, a free-trade industry group, estimated that steel and aluminum duties alone would cost the U.S. 400,000 jobs, and the U.S. Chamber of Commerce estimated millions of jobs were at stake.
"Retailers have thin profit margins, and they'll likely be forced to raise prices on products impacted," says Gold. "The tariffs will have a disproportionate impact on small businesses that have little control over their supply chains and will start to see higher prices from suppliers immediately and be forced to pass along those costs to their customers."
Large corporations will also be affected. General Motors laid off 14,000 workers last year in the U.S. and Canada, partly as a result of steel tariffs, while Ford said it lost $1 billion in profit last year. Polaris, a maker of motorcycles, snowmobiles and ATVs, told CNBC that the increased tariffs would cost the company $195 million to $200 million.
Overall, the trade war could hit the U.S. economy hard, according to an analysis from the Tax Foundation, a tax policy think tank. It found that if all tariffs announced so far were fully imposed by the U.S. and foreign countries including China, GDP would fall by $187.9 billion in the long run, "effectively offsetting almost one-half of the long-run impact of the Tax Cuts and Jobs Act."
What consumers can do in response to tariffs depends largely on what their needs are. If you're in the market for a nonessential expense like a TV, for example, you can likely hold off on buying one. If you can't or won't wait, you can either pay more, shop around for the best deal or buy something used.
"I think we have to slow down and really understand the difference between something we want and something we need," best-selling author and personal finance expert Chris Hogan told CNBC Make It when the Chinese tariffs first went into effect. "Upgrading a TV from a 50-inch screen to a 60-inch — that's not a need, that's a want."
How long you'll wait for prices to come down is unknown. Experts, including Hogan, predicted that the trade negotiations would be settled by now. That hasn't happened.
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