Trump’s escalating tariff war with China will hit TVs, toys, electronics and a rake of consumer goods

  
Via:  john-russell  •  2 months ago  •  23 comments

Trump’s escalating tariff war with China will hit TVs, toys, electronics and a rake of consumer goods
the tariffs announced last year will cost consumers an average of $767 per year. The latest tariffs will add another $500 a year in costs for the average U.S. household, Katheryn Russ, an economics professor at the University of California at Davis, told NPR.

S E E D E D   C O N T E N T


the tariffs announced last year will cost consumers an average of $767 per year. The latest tariffs will add another $500 a year in costs for the average U.S. household, Katheryn Russ, an economics professor at the University of California at Davis, told NPR.

There are some things parents can’t avoid buying.

The U.S. increased tariffs on $200 billion of Chinese goods to 25% from 10% Friday, following three rounds of tariffs last year. They account for roughly 50% of all Chinese exports to the U.S. on everything from hats to toys. One estimate says the tariffs announced last year will cost consumers an average of $767 per year. The latest tariffs will add another $500 a year in costs for the average U.S. household, Katheryn Russ, an economics professor at the University of California at Davis, told NPR.

Many consumer goods manufacturers and retailers were taken aback by the news. “The tariff increase inflicts significant harm on U.S. industry, farmers and consumers,” Jacob Parker, vice president of the U.S.-China Business Council trade group, said in a statement. “It will decrease the competitiveness of American companies, reduce the efficiency of their global supply chains, and reverberate through the U.S. economy. Pure and simple, this is a tax on the American consumer.”

Increased tariffs on Chinese goods will hike prices for consumers goods. Millions of Americans will stick with their old washing machine and television and computer monitor, and refrain from buying new clothes and furniture (unless, of course, they’re buying a house). But they may have a harder time avoiding the shops for their kids’ birthdays and during the busy holiday season when children expect new electronics and toys. The tariff hike could increase the cost of Apple’s AAPL, -0.01%  iPhone XS by $160, Morgan Stanley MS, +0.01%  analyst Katy Huberty wrote.

Companies won’t immediately increase their prices, said Jon Gold, vice president of supply chain and customs policy at the National Retail Federation. “Retailers will try to endure as much of the costs as possible but 25%, they can’t absorb all of that,” he said. Products currently shipping to the U.S. for sale won’t see hiked prices, but some products may become more expensive in the summer, such as back-to-school items, he added.

The U.S.-China trade talks appeared to be making progress before this latest roadblock. However, Mitul Kotecha, an analyst at TD Securities TD, -0.16% said that Trump may feel “emboldened” by the strength of the U.S. economy and, for the most part, the equity markets. “We had thought that a trade deal between the U.S. and China was close to being agreed and markets had become rather sanguine about the issues,” he wrote. “Indeed, headlines over recent weeks had been encouraging.”

Consumers may not agree. The Peterson Institute for International Economics said 23% of Trump’s tariffs were placed on consumer goods. “Consumer goods made up only 1% of the products of the first $50 billion of imports from China subject to his announced tariffs,” the institute said. “The explanation for this shift lies in the fact that there are fewer and fewer such supply chain elements left to target. Consumer products are much of the imports from China that were left.”

Retailers have been working to mitigate any adverse impact from President Trump’s trade war with China, but the latest move by Trump appears to have taken many of them as a surprise, Christopher Prykull, an analyst at Goldman Sachs GS, +0.01% said in a research note. “We also note that tariff risk had generally disappeared in our conversations with investors, which could introduce some volatility in shares of retailers more exposed.” Ultimately, Trump is also trying to strong-arm toy companies like Mattel MAT, +0.01%  to move their production out of China.

Companies won’t immediately increase their prices, said Jon Gold, vice president of supply chain and customs policy at the National Retail Federation. “Retailers will try to endure as much of the costs as possible but 25%, they can’t absorb all of that,” he said. Products currently shipping to the U.S. for sale won’t see hiked prices, but some products may become more expensive in the summer, such as back-to-school items, he added.

The toy industry was able to weather the tariffs last year, as the products were mostly finished and prices were set by the time the tariffs were announced. But this year will likely be quite different for manufacturers, retailers and consumers, toy industry watchers said. Individual toys are obviously not on the list of products affected, but some raw materials and chemicals are — including lithium batteries, popular in millions of toys and, for instance, the chemicals that make Silly Putty.

Toy manufacturers may want to speed up their shipments, in the event the president moves forward with a possible fourth round of tariffs. Retailers are already producing toys and getting ready to ship them for the summer and holidays. If, however, fourth round of tariffs was implemented prior to their arrival date that would hurt retailers, manufacturers and consumers, said Steve Pasierb, president and chief executive officer of the Toy Association.

Industry consultants are bracing for a tough holiday season, and many . Toy prices this holiday season will be higher, said Jackie Breyer, editor-in-chief of the Toy Insider, a toy review site. Even before last year’s holiday season, Breyer told MarketWatch last year when the first round of tariffs were announced, “2019 is a whole other story.” Electronics are among the hottest holiday toys and birthday gifts and, as such, analysts say this could impact retailers including Walmart WMT, -0.40% Home Depot HD, -0.01% and Best Buy BBY, +0.01%

“If your shoes and clothing costs more, there may not be money left to buy toys,” Pasierb said.

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JohnRussell
1  seeder  JohnRussell    2 months ago

There goes the middle class tax cut.

 
 
 
JohnRussell
2  seeder  JohnRussell    2 months ago

1250 dollars , per consumer (on average), will be leaving Americans pockets so that Trump can feel like a big man.

 
 
 
Greg Jones
2.1  Greg Jones  replied to  JohnRussell @2    2 months ago

Trump isn't afraid to get tough with asshole countries like China which has been taking advantage of wimpy presidents like Bush and Obama, who didn't seem to be interested in the ongoing trade deficit. You appear to not know much about how this all works, do you?  The tariffs will bring in all kinds of money.

 
 
 
lib50
2.1.1  lib50  replied to  Greg Jones @2.1    2 months ago

It's OUR FRICKEN MONEY!   WE PAY THE TARIFFS! 

Importers, most of which are American companies and businesses are the ones who pay the tariffs.  

 
 
 
Buzz of the Orient
2.1.2  Buzz of the Orient  replied to  Greg Jones @2.1    2 months ago

Is it ANY president's fault that American consumers WANT to buy Chinese goods?

 
 
 
Greg Jones
2.1.3  Greg Jones  replied to  lib50 @2.1.1    2 months ago
It's OUR FRICKEN MONEY!   WE PAY THE TARIFFS! 

You are terribly confused. We already pay tariffs to China.

Now they will be paying tariffs to the US...

if this even goes that far. It's not the end of world.

The experts are saying he is doing the right thing.

 
 
 
lib50
2.1.4  lib50  replied to  Greg Jones @2.1.3    2 months ago

I think you need to read how tariffs work, or try to explain wtf you are talking about.  Tariffs are imposed on imports from China, and the importers, who are mostly American companies, are the ones paying them, and they get passed on in most cases and we pay for them.  the Chinese government doesn't pay! 

https://www.reuters.com/article/us-usa-trade-china-tariffs-explainer/explainer-who-pays-trumps-tariffs-china-or-u-s-customers-and-companies-idUSKCN1SC1ZC

https://www.bloomberg.com/news/articles/2019-05-07/trump-china-tariffs-who-pays

President Donald Trump is justifying raising tariffs on Chinese imports on grounds they are helping the U.S. economy and are mostly paid by China. The opposite is true, economists say.

According to data from U.S. Customs and Border Protection, almost $15.3 billion in duties imposed by the Trump administration last year were assessed on imported goods from China as of April 10. Actual collections could lag and be lower with refunds and other factors.

While Trump has suggested on Twitter and in public comments that tariffs are somehow being charged to or paid by China, economists say that’s misleading. U.S. importers are responsible for the duties, and ultimately U.S. businesses and consumers pay through higher costs, they say.

.................................  see more inside article         .........................................                       ...................................

But those numbers appear to be estimates from a 2018 report based on historical data, said David Weinstein, an economics professor at Columbia University and one of the authors of the March study. Actual data on tariffs and trade from 2017 and 2018 showed that foreign firms didn’t lower their prices at all, so the full impact was born by U.S. firms and consumers, he said.

A separate paper published in March by economists Pinelopi Goldberg, the World Bank’s chief economist, Pablo Fajgelbaum of UCLA, Patrick Kennedy of the University of California, Berkeley, and Amit Khandelwal of Columbia Business School also found that consumers and U.S. companies were paying most of the costs of Trump’s tariffs.

It also went a step further: After factoring in the retaliation by other countries, it concluded the main victims of Trump’s trade wars had been farmers and blue-collar workers in areas that supported Trump in the 2016 election.

“Workers in very Republican counties bore the brunt of the costs of the trade war, in part because retaliations disproportionately targeted agricultural sectors,” the authors wrote.
 
 
 
Vic Eldred
3  Vic Eldred    2 months ago

It effects 2/10's of our economy and 4/10's of China's economy. If China resists they lose bigtime!

It went on for a long time. It took Donald Trump to do something about it!  In another few weeks, if China still hasn't moved, Trump gives 'em another big kick in the ass!

 
 
 
lib50
3.1  lib50  replied to  Vic Eldred @3    2 months ago

Its a kick in OUR ass.  We will be paying the higher prices, and they will never go back down to pre-tariff prices, they never do.  Going to wipe out those dollar/week tax cuts to the lucky Americans who got the cuts in a hot minute.  And many American markets won't be making up their lost foreign markets either. 

 
 
 
TTGA
3.1.1  TTGA  replied to  lib50 @3.1    2 months ago
Its a kick in OUR ass.  We will be paying the higher prices,

Then STOP buying their products.  This isn't hard to figure out.  Do you wish to have luxury goods or do you wish to support your country?

 
 
 
Texan1211
3.1.2  Texan1211  replied to  TTGA @3.1.1    2 months ago

Good point.

To me, complaining about this is akin to complaining that if we don't let illegal aliens in, our produce prices will rise. Doesn't seem coordinated with that $15 minimum wage so many want!

 
 
 
lib50
3.1.3  lib50  replied to  TTGA @3.1.1    2 months ago

I buy American when I can.  Does anybody realize the tariffs also cause American prices to rise?  They get parts from overseas as well. Some products only are available from China (I used to work for a company that imported a silica product from a specific area of China).  Many America products have components from China.  I'm not sure why you think its about luxury goods, this is about far more than that.  But hey, Trump made sure clothing was exempted in last years tariffs, so Ivanka doesn't have to deal with that.  I'm sure all things Trump can continue unimpeded by tariffs.   

 
 
 
TTGA
3.1.4  TTGA  replied to  lib50 @3.1.3    2 months ago
Many America products have components from China.

Then don't buy those products until they move all production back to this country.

I'm not sure why you think its about luxury goods, this is about far more than that

Food, water, clothing, some form of shelter and basic transportation are necessities.  Everything else should be considered to be a luxury. Do you consider a computer and smartphone to be necessities?  Of my 70 years, I've only had a computer for the last 10 and lived quite well before then.  We're getting way too hung up on fancy gadgets that simply aren't needed to sustain life.  So hung up that some of the people are willing to sacrifice their country in order to obtain them.

 
 
 
lib50
3.1.5  lib50  replied to  TTGA @3.1.4    2 months ago

I'm sorry, but that's not possible when it comes to parts that are ONLY available from China.   You just don't get instantaneous availability here out of the blue.  And very difficult to isolate the damage caused to American companies in a global economy.   There are ways to impose tariffs that are less damaging to us, but since Trump doesn't even understand how tariffs work, there is no way we trust him to do it right.  He continues to lie about it.  I would love to get America manufacturing again.  But that't not what will happen here, the damage to American wallets will be felt pretty quickly in many cases.  This is NOT just about unnecessary luxury items, it covers all kinds of things, and what is good for one American will have the opposite impact on another, its really complicated and way over Trump's head.   And again, we pay. 

https://www.chicagotribune.com/business/ct-biz-trump-tariffs-explained-20180709-story.html

https://www.asme.org/engineering-topics/articles/manufacturing-design/impact-tariffs-manufacturing-part-1

https://www.asme.org/engineering-topics/articles/manufacturing-design/impact-tariffs-manufacturing-part-2

Trump’s hefty 25 percent steel tariff was implemented to help U.S. steel makers, who are cheering the tariffs. Steel prices are increasing, and companies like Nucor are recording soaring profits. U.S. Steel says it will reopen plants in the U.S. and add hundreds of jobs. Barbara Smith, CEO of steel maker CMC, said in a recent earnings call the tariffs will boost local demand and production, and “assist in creating a fair and level playing field.” In a curtailed supply chain, research firm IHS Markit has recommended buyers beat tariffs by adopting a localized steel purchase strategy.

But smaller U.S. manufacturers using steel are feeling the brunt, most notably iconic motorcycle company Harley Davidson, which moved some production outside the U.S. to Thailand to address the growing demand for its bikes in the European markets. Other manufacturers have had to cut jobs because of the increased cost of acquiring steel and aluminum.

On a wide scale, steel and aluminum tariffs could result in a net loss of over 400,000 U.S. jobs, according to a study by The Trade Partnership. Of that number, 19,000 will be lost in the manufacturing sector, mainly in companies related to fabricated metals and food processing. But U.S. iron and steel manufacturers will be protected, with jobs increasing by about 23,000.

 
 
 
XDm9mm
4  XDm9mm    2 months ago

Hey John....

Maybe you should have a heart to heart chat with that Trump hater Senator Chuck Schumer of New York.  Here's his suggestion for President Trump.

Chuck Schumer urges Trump to 'hang tough on China' after latest tariff threat while other top Democrats are quiet

Source:  https://www.cnbc.com/2019/05/06/schumer-urges-trump-to-hang-tough-after-china-trade-tariff-threat.html

At least President Trump is doing what no other President before him has had the balls to do....  take on China directly and stop the bullshit.

 
 
 
Greg Jones
4.1  Greg Jones  replied to  XDm9mm @4    2 months ago

All Obama ever did was turn around, drop trou, and bend over.  What a timid wimpy POS he was and still is.

 
 
 
Tessylo
4.1.1  Tessylo  replied to  Greg Jones @4.1    2 months ago

Jealousy/envy is such an ugly thing 

 
 
 
lib50
4.1.2  lib50  replied to  Greg Jones @4.1    2 months ago

Obama knew how tariffs work and who gets hurt.  Trump U won't teach that.

https://www.reuters.com/article/us-usa-trade-tariffs-explainer/explainer-who-pays-trumps-tariffs-china-and-other-exporters-or-u-s-customers-idUSKCN1SB0UF

A tariff is a tax on imports. The CBP typically requires importers to pay the duties within 10 days of their shipments clearing customs.

So the tariffs are paid to the U.S. government by importing companies. Most importers of Chinese-made goods are U.S. companies, or the U.S.-registered units of foreign companies that import goods from China.

 
 
 
Greg Jones
4.1.3  Greg Jones  replied to  lib50 @4.1.2    2 months ago

You have no idea what you're talking about

 
 
 
lib50
4.1.4  lib50  replied to  Greg Jones @4.1.3    2 months ago

I've posted links with informative articles.  You post the same old Trump lies.   Post what the hell you are talking about.

 
 
 
Kavika
4.1.5  Kavika   replied to  Greg Jones @4.1.3    2 months ago

Greg, lib50 explained it quite well. If you believe he lib50 has no idea what what she is talking about perhaps you could explain how tariffs work and who is the responsible party for paying the tariff. While you're at it give a a run down on the harmonized code, custom clearance, CFS etc. We could all benefit from you extensive knowledge of international trade. 

 
 
 
Iamak47
5  Iamak47    2 months ago
Millions of Americans will stick with their old washing machine and television and computer monitor,

Good.  E-waste is a significant environmental problem in the US.

 
 
 
The Magic Eight Ball
6  The Magic Eight Ball    2 months ago

regardless of cost, we don't sell out our country for cheap crap from another nation.

 
 
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