Tariffs cause nothing but trade wars
If you’ve come this far, you must have seen how Canadian politicians and commoners are swearing retaliation and encouraging others to boycott American products. If that’s not enough, The Hill reports that electricity to the US may be blocked, gleefully.
You are going to pay the costs
Did you know that your shoes got costlier in 2018?
In 2018, 99% of footwear sold in the US were imported from other countries. The US already pays around $3 Billion in tariffs every year, in the footwear segment alone.
Now what exactly is going to get costlier? A research by NRF elucidates it the best.
Apparels to get 20% costlier
NRF’s report says that the consumer could end up paying at least 12.5% more and maybe even 20.6% more on whatever imported apparel is floating in the current market. Remember that $20 T-shirt that you could buy on amazon? Sorry folks, Master T says it should be priced at $23 or even $25 to make America great again !
Since most apparel is imported, higher tariffs mean higher prices for consumers. That’s it!
Sorry Kids, No Toys [30-55%+]
I choose not to be sarcastic, but maybe MAGA supporters are now going to flout Trump toys, I suppose. It is reported that the tariffs could hike the prices of toys by 36.3%, or in the worst case scenario, by a whooping 55.8%.
That is , unfortunately, parents may end up paying at least $10 to $15 more for every toy that’s priced around $30. That is, what is $30 now, will cost a parent around $40 to $55, or even more !
Your Furniture is going to be pricey !
Imagine paying 20% more on your comfy sofa, or maybe even 30% more. The report says that US consumers could loose as much as $6.4 Billion upto $10.7 Billion in the worst case. All your chairs are going to be pricey this time, maybe it’s better to sit on the floor like most Asians do !
Everything else in your house will get costlier
Since China accounts for most exports in the electronic sector across the globe, a tariff slapped directly on the import of electronic goods could harm the most. Since most manufacturing equipments are chinese-made, this could start a ripple effect across most sectors.
For the average consumer, this could mean that your phones, tablets or even car spares could get costlier. Your lawnmowers, vapes, televisions, and even a few telescope parts could reach sky-high prices.
For the businesses, since certain equipments aid in production, the costs for production will rise as initial expenditure to buy the machines will increase. Either businesses will have to bear the costs , or pass the costs to consumer, which is always the scenario.
The Overall Impact
Not only goods and parts, but even your food !
American consumers are going to lose a major chunk of their spending power. Such reckless tariffs could decrease the consumer expenditure by $46 Billion to $76 Billion. Apart from this, the US would have to pump up their production to match the existing demand for goods. If the government fails to match the demand, then prices could increase furthermore, and countries will slap retaliatory tariffs, and nobody gains anything.
US could permanently lose markets
What happens if somebody slaps tariffs so much, that sellers just quit?
The exact same scenario happened in 2018. When tariffs were slapped on China by America, the former retaliated and slapped counter tariffs on the latter. China could manage the imports from elsewhere, but America could not handle the retaliatory tariffs. This lead chinese importers seek markets elsewhere, and they begun imported from Mexico and Brazil.
The US lost 32% of the market share of soybeans in China, just because someone imposed tariffs on chinese goods, and this caused a trade war, and voila.
Sources & Bibliography
NRF’s paper : https://nrf.com/research/estimated-impacts-proposed-tariffs-imports-apparel-toys-furniture-household-appliances
China US Soybean Trade war : https://en.wikipedia.org/wiki/China%E2%80%93United_States_trade_war
Leave a Reply