- American shoppers could face $US1,000 in extra costs a year thanks to the latest set of US tariffs on Chinese goods, JPMorgan says.
- The Trump administration slapped tariffs on $US112 billion worth of Chinese goods on Sunday, and plans to impose duties on another $US160 billion in mid-December.
- Footwear, apparel, and consumer electronics such as Apple Watches are now subject to 15% tariffs, while duties on other Chinese imports such as cell phones and laptops have been delayed until December 15.
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The Trump administration slapped tariffs of 15% on $US112 billion worth of Chinese goods including footwear, apparel, televisions, and video game consoles on Sunday.
Shoppers are about to feel the pain. Americans could face $US1,000 in extra costs a year thanks to the latest US tariffs on Chinese goods, JPMorgan says. The bank pegged the cost of the trade war to consumers at $US600 a year without the new duties.
After the president’s aides warned him further tariffs could “ruin Christmas,” CNN reported, he pushed back duties on another $US160 billion worth of Chinese imports such as cell phones and laptops until mid-December.
Together, the tariffs will “significantly” hurt the “wallet of the US/consumer voter ahead of the 2020 election,” JPMorgan equity strategist Dubravko Lakos-Bujas and his team wrote in a report dated August 16. That claim is supported by a high-profile study earlier this year, which found the full effect of Trump’s tariffs fell on consumers last year.
As a result, the tariffs have major implications for consumer spending – the largest component of US GDP – which has appeared fragile recently. While retail sales climbed 0.4% in July, consumer sentiment posted its sharpest monthly decline December 2012 in August, a University of Michigan survey found.
JPMorgan’s $US1,000 estimate might prove conservative, given it was based on a projected tariff rate of 10% and Trump has imposed a 15% duty.
Judging from the combative rhetoric from both sides, and their lack of progress in resolving the year-long dispute, the trade war’s price tag for consumers could climb even higher.