US consumers could soon feel the effects of the trade war with China
The effects of escalating trade tensions between the US and China could soon be passed on to US consumers after a new list of taxable Chinese imports is expected to be announced.
According to Reuters, an analysis of Chinese imports found that to tax $100 billion worth of goods the US may have to target computers, cellphones, toys, clothing, furniture and other consumer products.
This could prompt price rises at U.S. retailers.
“There is no way to avoid consumer products when you’re thinking about how to hit $100 billion worth of imports coming from China,” Hun Quach, vice president of international trade for the Retail Industry Leaders Association, told Reuters.
Companies may decide to absorb the additional costs or could consider relocating production from China to other countries.
In January, President Donald Trump imposed import tariffs on Chinese solar panels and washing machines. In March, the US added tariffs on an additional $50 billion worth of other Chinese imports.
China responded by announcing a list of US goods that would be subject to tariffs.
On April 4, Trump directed the U.S. Trade Representative to consider $100 billion in additional levies.
US imports from China totaled $506 billion last year.
American supply chains could also be affected as many consumer electronics rely on exporting semiconductors or software to China to make their products and import them back to the US.
Chad Bown, a senior fellow at the Peterson Institute for International Economics, told Reuters: “You end up shooting yourself in the foot, shooting your allies in the foot, and maybe you wound China’s big toe,”
Video – What is International Trade
International trade refers to the buying and selling of goods and services across borders; from one nation to another.