The administration of Trump applied the new round of tariffs on imports of China this morning. It possibly raises prices Americans pay for sporting goods, some clothes, shoes, and other consumer goods in advance of the shopping season of holiday. The fifteen percent of tariffs apply to around $112 billion of Chinese imports. Over two-thirds of the consumer items, the U.S. imports from China, which will now face more taxes. The United States administration previously avoided targeting the consumer goods in its previous rounds of tariff hikes.
However, several retail goods prices will now likely to escalate, the move of the administration threatens the main driver of the United States economy; Consumer spending. As businesses back off on spending of investment and exports slow, facing weak worldwide growth, shoppers of America have a key positive spot for the economy.
U.S. Companies warned to transfer higher Prices to Customers
Due to the higher tariffs of Trump, several firms of the United States threaten that they will compel to move the higher prices to their customers for paying the additional duty on Chinese imports. Whereas, some companies decided to absorb the higher prices instead of raising the prices for their customers. After tariff hike of Sunday, eighty-seven percent of Chinese clothing and textiles and fifty-two percent of shoes would impose to import taxes.
On December 15, the United States administration planned to enforce the 2nd round of fifteen percent tariffs. This time on about $160 billion of imports. If all these tariffs come into effect, virtually all products imported from China will be included.
Trade War for over one year
The administration of Trump engaged in a trade dispute with China for over one year. It is the blame of the United States that China is stealing the trade secrets of the U.S. and unethically subsidizes its own firms in its move to overtake the U.S. in such high-tech industries as AI and electric cars.
Trump imposed import tariffs on the worth of billions of dollars on Chinese imports in a try to force China to modify its trade practices while Beijing retailed with tariffs on United States exports.
According to the study of J.P Morgan tariffs of Trump will cost the average United States household $1000 per year. It all done before Trump administration raised the September 1 and December 15 tariffs from 10% to 15%.
Furthermore, the president also announced that the existing 25% taxes on another group of $250 billion of Chinese goods would surges to 30% on October 1. That raise could decline an already slowing economy of the U.S.