With the Trump administration more than doubling tariffs on billions of dollars of Chinese imports, will Americans soon see higher prices on store shelves?
WASHINGTON — With the Trump administration more than doubling tariffs on billions of dollars of Chinese imports, will Americans soon see higher prices on store shelves?
Yes, but it may take a few weeks. U. S. import taxes on $200 billion of Chinese goods jumped to 25% on Friday, from 10%, as President Trump followed through on his threat to hike duties after he accused Chinese negotiators of backtracking on previous concessions they had made in ongoing trade talks .
The tariff hikes will impact thousands of items, including consumer goods like furniture, luggage, seafood and handbags. Businesses will pay more for chemicals, telecom equipment, and plastics. And car companies will pay more for auto parts, potentially raising new car prices.
Still, the most widely-purchased products that Americans buy from China — clothes, shoes, toys, and electronics such as the iPhone — have not yet been hit with extra tariffs. The Trump administration has sought to avoid taxing those items because the impact on consumers would be so visible. But Trump has threatened to change that if a deal isn’t reached, and said he would place tariffs, if necessary, on the remaining $290 billion or so of Chinese imports.
Here’s a closer look at the tariff increase and how it might play out:
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THE PRESIDENT SAYS CHINA IS PAYING THESE TARIFFS, NOT AMERICANS, RIGHT?
Yes, but he is wrong. Instead, American businesses and consumers will pay.
Friday morning Trump tweeted, «Tariffs will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind.» But that’s not how import taxes work. They aren’t paid by Chinese companies. They are paid by the U. S. importer, which can be a large retailer, a wholesaler, or a manufacturer. Those companies have to pay the tariffs or the products won’t make it off the docks of a U. S. port.
Huge U. S. importers, such as major retail chains, may have the clout to force a Chinese supplier to cut their prices to offset some or all of the tariffs. But studies show that hasn’t made much difference so far.
