How much will the US-China trade war cost you?
Another round of tariffs on Chinese goods went into effect at midnight on Sunday, the latest in the more than year-long trade war between the world’s two largest economies that’s culminated in an import duty on just about every product sent from Beijing to the U.S.
The most recent round, however, — a 15 percent tariff on $112 billion worth of goods, most of it concentrated on items like footwear, clothing and textiles — spurred fears about how the trade war will ultimately affect American consumers. Until then, most U.S. imports of clothing and shoes from China have been spared.
Now, economists at the University College London and the London School of Economics estimate the newest tariff could cost average households about $460 over a one-year period, according to the New York Times. For some of the wealthiest households, that cost might spike to $970, but fall to as low as $340 for the poorest.
The cost of the trade war is expected to increase more sharply for nondurables, like food and clothing, than durables, like cars and electronics, the Times reported. That’s where the cost increase of tariffs could bite: Unlike durables, most Americans rely on non-durable goods and therefore can’t really avoid the price hike.
The trade spat between the U.S. and China first began in March 2018, when Trump imposed tariffs on $50 billion worth of Chinese goods, targeting 1,300 items. Less than two weeks later, China responded in kind, slapping tariffs on 128 American products ranging from aluminum, airplanes and cars to pork and soybeans. (When researchers conducted a similar analysis last year, they estimated tariffs cost $60 annually).
The tit-for-tat fight has continued to escalate; up until Sunday, the U.S. already imposed a 25 percent tariff on $250 billion worth of Chinese goods.
Now, however, the share of Chinese imports of textiles and clothing affected by Trump’s tariffs leaps to 87 percent from 10 percent, according to the Peterson Institute for International Economics. In fact, under the new schedule, 69 percent of consumer goods will face an import duty, up from 29 percent now.
Earlier tariffs imposed by the Trump administration mostly avoided direct consumer hits, instead of narrowing in on items like imported parts and components. By last September, almost 82 percent of imported inputs from China were covered by a tariff.
“The bottom line is that, for the first time, Trump’s trade war is likely to directly raise prices for a lot of household budget items like clothing, shoes, toys, and consumer electronics,” PIIE senior fellow Chad Brown wrote in a report.
CLICK HERE TO READ MORE ON FOX BUSINESS
More than 160 business organizations, represented by Americans for Free Trade, urged Trump to postpone all tariff rate increases, citing concerns about cost increases for U.S. manufacturers and farmers.