As President-elect Donald Trump prepares to return to the Oval Office, U.S. retailers that rely on foreign suppliers are prepared to pass on the costs of his proposals. import duties For consumers, this could lead to higher prices for various products.
Americans will lose between $46 billion and $78 billion annually in purchasing power on products such as apparel, toys, furniture, appliances, footwear, and travel goods due to new tariffs, the National Retail Federation said in a study released Monday. He said there is.
“Retailers rely heavily on imported products and manufactured components to offer customers a wide variety of products at affordable prices,” Jonathan Gold, vice president of supply chain and customs policy at NRF, said in a statement. said. “Tariffs are taxes paid by U.S. importers, not by foreign countries or exporters. These taxes ultimately come out of consumers’ pockets through higher prices.”
For example, a $40 toaster oven will retail for $48 to $52 after the tariffs, while a $50 pair of running shoes will cost $59 to $64, according to industry groups. A $2,000 mattress and box spring set will cost between $2,128 and $2,190, according to NRF.
During President-elect Trump’s first term, his administration imposed tariffs of up to 25% on more than $360 billion of Chinese goods. President Joe Biden’s White House has kept most of those tariffs in place, adding additional duties on Chinese electric vehicles and products including microchips.
Now, President Trump has said he plans to impose a 60% tax on products from China and a 10% to 20% tax on all $3 trillion worth of foreign goods that the United States imports annually. Treasury Secretary Janet Yellen has warned that such broad tariffs would reignite inflation, broadly speaking because the tariffs would be paid primarily by U.S. consumers. There is. shared by Other economists on both sides of the political aisle.
“A consistent theoretical and empirical finding in economics is that tariffs are borne by domestic consumers and businesses, not by foreign countries,” says Yale University’s Bipartisan Budget Lab. This was stated in an analysis published in mid-October.
President Trump has repeatedly insisted that foreign companies will pay for the costs. talk about gathering Tariffs “will be paid by each country,” he said at the Economic Club of Chicago last month. In reality, U.S. importers pay duties to U.S. Customs and Border Protection when their goods cross the border.
“These policy actions amount to regressive tax cuts that are only partially financed by regressive tax increases, costing the typical middle-income household approximately $1,700 per year in increased taxes. It will become.” According to economists At the Peterson Institute for International Economics. The proposed tariffs would shift the tax burden from wealthy Americans to lower-income Americans, the nonprofit group said in a policy brief released in August.
For now, it is unclear when the new Trump administration will seek to tighten tariffs. According to Oxford Economics, the process of finalizing the legislation needed to raise the levy could take nearly a year, and the negative impact could not be felt until 2026.
Lawrence Summers, a Harvard professor and former US Treasury secretary, questioned the wisdom of taxing imports, pointing to the potential impact on prices. “To parents, we are in the holiday season and most of our toys are imported from China,” Summers tweeted on Thanksgiving Day.
President Trump argued that the tariffs would force U.S. companies to manufacture products on U.S. soil instead of buying them from foreign suppliers.
But some companies have other plans.
Philip Daniele, CEO of auto parts supplier AutoZone, told Wall Street analysts during an earnings call in late September that “if tariffs are imposed, we will pass the cost of those tariffs on to consumers.” he said. “We usually raise prices before that. We know what the tariffs will be. We usually raise prices before that,” Daniele said.
The company said key suppliers to AutoZone include companies based in China, India and Germany.
Donald Allan Jr., CEO of Stanley Black & Decker, said last week that his toolmaker is planning to potentially impose additional duties on imports starting in the spring. “Obviously, you’re going to see price increases associated with the tariffs that we put into the market.”
Allan downplayed the idea of moving manufacturing back to the United States, saying it would not be cost-effective. The company’s options could include “relocating some of its production and supply chains to different parts of the world,” such as from China to other parts of Asia or even Mexico, the executive said. said.
Such a shift is already underway at Shelton, Conn.-based Acme United, which now says its Westcott-branded products, such as rulers, are made in Thailand and the Philippines to avoid tariffs targeting China. Chief Executive Officer Walter Johnsen said in an October earnings call.
Acme has shifted production of some medical products to factories in India, Egypt, and the U.S. states of Florida, North Carolina, and Washington, the executive said.
According to reports, the amount of Chinese goods imported by the United States in July and August increased by 11% compared to the same month last year, prompting companies to place higher-than-usual import orders and stock up ahead of new tariffs. is being carried out. Census Bureau.
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