Get ready to pay more—again. The escalating trade war with China, which means rising tariffs on both sides, is bad news for Americans.
“Tariffs on goods traded between the U.S. and China have already increased in several stages since early 2018,” said CNBC. “Now, President Donald Trump has added a 25% tariff (up from his original proposal of 10%) on another $200 billion worth of Chinese imports, and China hit back with 5% to 10% percent duties on another $60 billion worth of U.S. goods.”
Experts say we could be seeing higher prices as a result of this escalation as early as this summer, and that has economists yelling, “Buy, buy, buy now!” in order to avoid what a report from Oxford Economics estimates will be an $800 hit to every U.S. household.
There is some question as to how the tariffs will play out—after all, Trump said that China will suffer most of the economic impact. “Yet experts say the burden will land squarely on U.S. consumers,” said CNBC. They used tariffs imposed last year on imported washing machines as an example; “U.S. manufacturers responded to reduced competition from imports by raising their prices and, as a result, more than the full amount of the tariff was passed on in the way of higher prices. U.S. consumers paid 125% to 225% more.”
So what can you do? Ramp up future spending now, if possible.
“To get ahead of the next waves of tariffs, (University of California, Davis, professor of economics and specialist in international trade) Katheryn Russ recommends buying some items now, if possible — such as backpacks and other back-to-school supplies — rather than holding off until later in the year,” said CNBC. Ditto for things like iPhones; “The price for an iPhone XS would rise to $1,142, up from $1,000, if the White House implements a 25% tariff on the rest of China imports, J.P. Morgan said in a note to clients.” Expect a “similar impact on TVs and everyday purchases, “where consumers will be harder hit, such as frozen food and paper goods, including diapers and paper towels.”
Phil Crone, Executive Officer of the Dallas Builders Association, warns of the effect on the housing market. “From tile to countertops, laminates, lighting, and furnishing, about 450 products commonly found in new homes and remodeling projects are seeing tariffs rise from 10 percent to 25 percent,” he said. “According to the National Association of Home Builders (NAHB), homeowners and homebuilders nationwide will be paying an additional $2.5 billion.”