The 25% tariff that the United States imposed on July 16 on $34 billion of imports from China (with $16 billion more to come, likely in August) touches nearly every corner of American consumers’ lives. Why? Because it’s effectively a tax that represents a cost to U.S. producers, wholesalers and retailers. Sooner or later, it gets passed on to consumers in the form of higher sticker prices for everything from an X-ray to a new car. The only real question is how quickly it happens.
Companies that import their products have limited choices: absorb the extra cost of the tariff, increase selling prices immediately, shift production to other countries or do some combination of the three.
Initially, expect a relatively limited impact on consumers because companies will hold the line on prices while they monitor what action competitors take. Plus, the Trump administration excluded some higher-volume goods when it was drawing up lists of Chinese products to target with tariffs. For example, it left off some high-profile consumer goods such as flat-screen TVs, so they shouldn’t go up in price.
Don’t expect the pain of higher prices to be over quickly. There’s another round of tariffs — 10% this time — coming on thousands more imported items from China. They won’t take effect for another two months. But when they do, they’ll affect a huge range of goods that consumers and retailers buy and use on a near-daily basis, from automobile tires, spark plugs and windshield wipers to handbags, batteries and furniture. So brace for successive rounds of price rises on a steadily growing range of imported goods, for much of the rest of the year.
Here are eight product categories that soon may put a bigger dent in your budget: