American consumers, already feeling some of the effects of the trade between the United States and China, could soon take a bigger hit to their wallets if new tariffs threatened by President Donald Trump are enacted.
That’s the conclusion from analysts at investment bank J.P. Morgan, who said in a new report that additional tariffs set to be implemented Sept. 1 could end up costing the average American household an extra $1,000 per year. Morgan analyst Dubravko Lakos-Bujas said that tariffs already put in place have cost U.S. households an additional $600, and that the upcoming new round of import taxes will have a larger negative effect on Americans spending plans.
“The impact from reduced spending could be immediate for discretionary goods and services since tariffs are regressive,” Lakos-Bujas said. “There is no simple way to compensate consumers.”
Among the Chinese-made products set to see a 10% bump in tariffs are food items, shoes and boots, and some consumer tech products such as TVs, printers and smart speakers. Lakos-Bujas said that if tariffs and prices continue to rise, consumers may take that into consideration when they go to the polls next year to vote for president.
Last week, Trump gave a break to producers of some electronic goods by delaying until Dec. 15 the implementation of new tariffs on products such as cellphones, laptop computers and tablets, keyboards, wired headphones, remote-controlled video game handsets and TV set-top boxes. Trump’s delaying of some of the new tariffs was seen as an effort to alleviate consumer concerns about prices rising ahead of the holiday shopping season.
Lakos-Bujas said that even with the deadline for the Sept. 1 tariffs now less than two weeks away, “we believe there is a good chance they (the Trump Administration) end up reversing their decision and finding a way to reach some common ground with Chinese negotiators” that will put any new tariffs on hold.
