Trade Wars

June 26, 2018

 

 

The trade dispute between the United States and China continues to worsen. So far, the effect on consumers has been minimal because the Trump administration has targeted intermediate goods purchased primarily by businesses. Eventually, however, those costs will be passed on to the consumer. With the proposal of additional tariffs on $200 billion in Chinese goods, and possibly as much as $400 billion if China retaliates, consumers will likely see price increases in consumer products ranging from clothing to electronics. One consumer product has already seen a price hike – washing machines have risen 17 percent since January.

 

The chart below shows a list of consumer goods that could see price increases going forward. A possible 10 percent tariff could be placed on the next round of products, which include furniture and electronics. In particular, smartphones could be the most significant target as 70 percent of cell phones are assembled in China.

 

 

 

 

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