As the holiday season bursts forward with the spirit of giving, consumers and businesses may have to pay more for some products due to this year’s trade wars.
This season’s deals, however, may be the best to be had for a long while if President Donald Trump moves ahead with a new round of tariffs on Chinese goods in January.
“While popular rhetoric suggests that tariffs are ‘slapped’ on a foreign country, tariffs are, of course, taxes paid by Americans,” said John Murphy, senior vice president for international policy for the United States Chamber of Commerce in Washington, D.C. “It’s U.S. consumers, not foreigners, who are stuck with the bill – in this case, a multi-billion dollar bill that we will all have to pay.”
This year, the United States Trade Representative implemented new tariffs on about $250 billion worth of imported goods from China. China immediately retaliated with its own tariffs on American goods. If China fails to meet the president’s trade concessions, an additional 15 percent levy will go into effect on $200 billion of those goods in January.
Even more daunting, Trump has threatened to slap a new round of tariffs on another $267 billion of Chinese goods. China will likely retaliate. Some hope for an end to the trade war hinges on President Trump and Chinese leader Xi Jinping meeting face-to-face at the G20 summit in Argentina Nov. 30.
Meanwhile, consumers and businesses may see higher prices on imported goods that were hit with new tariffs this year. Televisions, washing machines, freezers, refrigerators, microwave ovens, construction materials, solar panels, cars, auto parts, furniture, industrial machine parts, laptops, and baseball gloves are among items impacted. Imports of televisions from China showed a 37 percent hike in pricing at the end of October, according to trade data research firm, Panjiva. Laptops were up 46 percent and freezers 57 percent.
While prices are rising, there may be a silver lining for holiday shoppers. There appears to be an overstock on many goods as retailers rush to import goods before new levies kick in next year, Panjiva reports. That could mean deals are still to be had.
Auto makers, already strapped with higher prices for aluminum and steel goods due to tariffs from Mexico and Canada this year, said prices on cars and trucks could be rising with or without new tariffs from China, John Bozzella, CEO of the Association of Global Automakers CEO, told Fox News last Monday.
Some relief could come with the new NAFTA. Negotiations are underway for the lifting of retaliatory tariffs from Mexico and Canada once the pending United States-Mexico-Canada Agreement is in place.
“We need more trade and more trade talks, not barriers to trade,” Bozzella said. “Our future in the U.S. auto industry is in exports. We are at 17 million units of annual sales. That’s probably a peak. We don’t really know what the other side of that peak looks like.”
Businesses, families and jobs in Arizona and across the nation already are feeling a pinch from the first rounds of tariffs and the ensuing retaliatory tariffs from China, Mexico and Canada.
Meanwhile, new and retaliatory tariffs could hit Americans’ pocketbooks when it comes to smaller consumer goods like toys, cosmetics and electronics.
In Arizona, current retaliatory tariffs affect approximately $808 million in exports, according to the U.S. Chamber. Not only pricing is at risk. Almost 773,000 Arizona jobs are supported by global trade.
For exporting farmers and ranchers here, the prospect of new tariffs is extremely worrisome, said Phil Bashaw, director of government relations for the Arizona Farm Bureau.
“While cotton prices remain high, this is a major export crop for Arizona,” Bashaw cited. “The Chinese tariffs on this crop are already high.”
Worse, the ongoing trade disputes threaten Arizona’s ability to regain Chinese markets as they find other places to buy product, he said.
“This is market share that will take a very long time for us to recover,” Bashaw said. “We are hopeful the administration can come to a favorable conclusion to this trade dispute soon.”