Over the next few days, President Trump will meet with China’s President Xi and other international leaders at the annual G20 Summit in Japan. The agenda will include discussion on trade and the global economy — a hot topic for the administration, which has instituted 25 percent tariffs on $250 billion worth of goods from China over the past year. The administration is currently considering imposing the same levy on another $300 billion in Chinese goods, of which about 60 percent are consumer products like apparel and toys. That would bring the total to $550 billion in Chinese goods — virtually all products that China exports to the United States, including not just consumer merchandise but parts and materials needed by U.S. companies to make “Made in USA” products.
Combined with the tariffs already implemented and retaliation from China, the new tariffs currently being proposed would raise costs for the average U.S. family of four by more than $2,000 each year.
Tariffs are taxes American companies pay on imported goods. At best, tariffs disrupt supply chains and force retailers to look to other countries for alternative suppliers. The tariffs are ultimately passed along to U.S. consumers in the form of higher prices. And if prices go up too much, the cost of tariffs could ultimately force retailers and other businesses to lay off workers, defer investments — or even go out of business.
Combined with the tariffs already implemented and retaliation from China, the new tariffs currently being proposed would jeopardize more than 2 million U.S. jobs and raise costs for the average U.S. family of four by more than $2,000 each year, according to NRF research. As NRF Senior Vice President of Government Relations David French testified last week at a hearing held by the Office of the U.S. Trade Representative, “These higher costs will be paid by households at all income levels, but tariffs are a regressive tax that hits families living paycheck to paycheck the hardest. These are consumers who can least afford to pay more for everyday staples.”
A recent study commissioned by NRF and prepared by the Trade Partnership Worldwide looks at how much more consumers would pay for a wide range of items if the new tariffs go into effect. Here’s where they could hurt wallets the most.
Apparel
Getting children ready for the back-to-school season would cost more. Consumers would pay $4.4 billion more each year for apparel like coats, sweaters, pants and scarves.
Shoes
China is a major supplier of shoes to the United States. Additional tariffs would cause U.S. prices for footwear from sandals to rain boots to rise by 8 percent, amounting to $2.5 billion.
Toys
The holiday season is a critical time for retailers, and tariffs are poised to impact consumers’ gift lists. China supplies 88 percent of U.S. toy imports, meaning Americans would pay $3.7 billion more to surprise and delight the young ones in their lives with toys.
Household appliances and furniture
Those upgrading or redecorating their homes would find higher prices on appliances and furniture. Customers would pay $1.6 billion more for appliances like dishwashers and dryers and $4.6 billion more for furniture.
TVs
The tariffs would increase the price of a television set imported from China that currently sells for $250 to about $300, costing consumers $711 million more per year.
While addressing China’s unfair trade practices is important, taxing American businesses and driving up prices for consumers in the process is the wrong approach. Learn more about what you can do to urge Congress and the administration to end the trade war.