As President-elect Donald Trump prepares to return to the Oval Office, American retailers that rely on foreign suppliers are bracing for his proposed spending spree. import duty For consumers, this could potentially lead to higher prices for a range of products.
The National Retail Federation said the new tariffs would cause Americans to lose between $46 billion and $78 billion each year in spending power on products including apparel, toys, furniture, home appliances, shoes and travel accessories. conclusion Released on Monday.
“Retailers rely heavily on imported products and manufacturing components to offer their customers a wide variety of products at affordable prices,” said Jonathan Gould, NRF vice president of supply chain and customs policy. Said In a statement. “A tariff is a tax paid by the American importer, not by a foreign country or exporter. This tax ultimately comes out of consumers' pockets through higher prices.”
For example, a $40 toaster oven will retail for $48 to $52 after the tariffs, while the price of a $50 pair of shoes will rise to $59 to $64, according to the industry trade group. A $2,000 mattress and box spring set will cost $2,128 to $2,190, the NRF said.
During President-elect Trump's first term, his administration imposed tariffs of up to 25% on more than $360 billion worth of products from China. President Joe Biden's White House kept most of those tariffs in place and added more tariffs on goods including Chinese electric cars and microchips.
Now, Trump has said he plans to impose a 60% tax on goods coming from China and a 10% to 20% levy on all $3 trillion of foreign goods the US imports annually.
Such sweeping tariffs would reignite inflation because it would be paid for mostly by American consumers, Treasury Secretary Janet Yellen warned, offering a broadly general outlook. shared by Other economists on both sides of the political aisle.
“A consistent theoretical and empirical finding in economics is that domestic consumers and domestic firms bear the burden of tariffs, not foreign countries,” Yale University's nonpartisan Budget Lab said in a statement. Analysis Published in mid-October.
Trump has repeatedly argued that foreign companies will foot the bill, telling a meeting “Countries will pay” for the tariffs, he said at the Economic Club of Chicago last month. In fact, US importers pay tariffs to the US Customs and Border Protection agency when their goods cross the border.
“These policy steps would be similar to regressive tax cuts, only partially paid for by regressive tax increases,” and would cost a typical middle-income family about $1,700 per year in increased taxes,” According to economists At the Peterson Institute for International Economics. The proposed tariffs would shift the tax burden from the wealthy to low-income Americans, the nonprofit also said in a policy Short Published in August.
Harvard University professor and former US Treasury Secretary Lawrence Summers questioned the wisdom of imposing a tax on imports given the potential impact on prices. “For parents, we are coming into the holiday season and most of our toys are imported from China,” Summers. Tweeted On Thanksgiving Day.
Trump has argued that tariffs force American companies to make goods on American soil rather than purchasing from foreign suppliers.
But some companies have other plans.
“If we get tariffs, we will pass those tariff costs back onto the consumer,” said Philip Daniels, CEO of auto parts supplier AutoZone. told Wall Street analysts in an earnings call in late September. “We would normally raise prices before this – we know what the tariffs will be – we would normally raise prices before this,” Daniels said.
According to the company, AutoZone's major suppliers include companies based in China, India and Germany.
Donald Allen Jr., CEO of Stanley Black & Decker. Said His equipment-producing company said last week the possibility of additional tariffs on imports from the spring onwards. “Obviously, coming out of the gate, prices will increase with the tariffs [would] Put it in the market.”
Allen rejected the idea of moving manufacturing back to the US, saying it would not be cost effective. The company's options could include “moving aspects of production and supply chain to different parts of the world,” the executive said, including China to other parts of Asia and possibly Mexico.
Such a change has already been made by Shelton, Connecticut-based Acme United, which now has Westcott-branded products made in Thailand and the Philippines, such as sovereigns, which avoid tariffs targeting China, CEO Walter Johnson said. Said In the October earnings call.
Acme has stopped production of some medical products at plants in India, Egypt and the US in Florida, North Carolina and Washington state, the executive said.
Businesses have also stocked up by ordering more imports than usual ahead of the new tariffs taking effect, as the US imported 11% more Chinese products in July and August compared with the same two-month period a year earlier. To census Bureau.