Higher China tariffs could cost Americans $767 per year
- The White House looks poised to raise tariffs on $200 billion of Chinese imports to 25 percent from 10 percent.
- An average family of four may take a hit of $767 a year, a trade group has estimated.
- If the administration eventually adds tariffs to all Chinese imports and China retaliates, that family could pay more than $2,000.
President Donald Trump's renewed threat to hike tariffs on $200 billion in Chinese imported goods as soon as Friday sent markets reeling and retailers warning consumers will be hit hard. But how much pain will consumers feel?
A good amount, apparently. Taken together, the tariffs -- levies paid by consumers and companies, not China -- could cost an average family of four $767 a year, one study from a group called the Trade Partnership estimated in February. The group also forecast the tariffs would cut U.S. employment by 934,000 people and subtract roughly 0.4 percentage points from U.S. GDP.
Mr. Trump Sunday tweeted that he intended to hike tariffs on Chinese goods to 25 percent from 10 percent put in place in September. That's on top of other tariffs, including those on steel and aluminum and those on an earlier $50 billion on Chinese imports imposed last year. As has been its pattern, the Chinese government is threatening to retaliate. A Commerce Ministry spokesman said Thursday that "China will have to take necessary countermeasures" if the U.S. tariffs move ahead.
Wall Street now appears to be betting that the higher duties will be imposed Friday. So far, a swath of consumer goods has mostly avoided large price increases. Some products, though, already made the list in September: shoes, luggage and accessories like backpacks and purses.
A blow to consumers
The American Apparel and Footwear Association (AAFA), along with 15 other groups, predicted last year that just the consumer goods from China that were subject to last year's 10 percent increase would, at 25 percent, cost families an additional $500 a year.
And that "doesn't account for any price increases that other suppliers will surely charge as they respond to the cost increases," the group wrote. Retailers including Walmart testified in Washington last year that a 25 percent duty would be a blow to consumers looking for everyday items, including food.
A child's backpack, for instance, that sold for $40 before September 2018 now costs $44. With the 25 percent increase, that could rise to $50, according to rough estimates provided to CBS MoneyWatch by the AAFA.
Leather handbags that cost roughly $80 before September and now cost roughly $96, could hit $108, when duties on the leather itself are included. And luggage previously priced at $150 that consumers now pay $165 for may reach $187, according to those estimates.
Absorb tariffs or pass them along?
It can be difficult to calculate exact price increases for consumer products for a number of reasons, economists and experts say. That's in part because some companies have decided to cut costs to absorb the higher tariffs, rather than pass the levies on to consumers.
Mr. Trump also said Sunday via Twitter that negotiations with China were progressing "too slowly," and he threatened to jack up tariffs on $325 "Billions Dollars" in Chinese goods to 25 percent -- that would effectively impose a tariff on all Chinese products that enter the U.S., including most toys and consumer electronics.
Here are some products that tariff increases and potential increases could affect, based on a list from the U.S. Trade Representative.
Products already subject to the 10 percent tariffs that are set to rise to 25 percent on Friday:
- Shampoo
- Dog leashes
- Refrigerators
- Bicycles
- Some kinds of fish
- Fruit
- Nuts
- Some furniture
- Backpacks
- Purses
- Some luggage
- Wallets
Products that could be in the remaining $325 billion of Chinese imports:
- Clothing
- Toys
- Shoes
- Furniture not already subject to previous tariffs
- Electronics, like mobile phones, and parts
- Electrical equipment
- Electrical machinery
- Prepared food
- TVs
