Trump's newest China tariffs just kicked in - and JPMorgan says they could cost American shoppers an extra $1,000 a year
- American shoppers could face $1,000 in extra costs a year thanks to the latest set of US tariffs on Chinese goods, JPMorgan says.
- The Trump administration slapped tariffs on $112 billion worth of Chinese goods on Sunday, and plans to impose duties on another $160 billion in mid-December.
- Footwear, apparel, and consumer electronics such as Apple Watches are now subject to 15% tariffs, while duties on other Chinese imports such as cell phones and laptops have been delayed until December 15.
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The Trump administration slapped tariffs of 15% on $112 billion worth of Chinese goods including footwear, apparel, televisions, and video game consoles on Sunday.Shoppers are about to feel the pain. Americans could face $1,000 in extra costs a year thanks to the latest US tariffs on Chinese goods, JPMorgan says.
After the president's aides warned him further tariffs could "ruin Christmas," CNN reported, he pushed back duties on another $160 billion worth of Chinese imports such as cell phones and laptops until mid-December.Together, the tariffs will "significantly" hurt the "wallet of the US/consumer voter ahead of the 2020 election," JPMorgan equity strategist Dubravko Lakos-Bujas and his team wrote in a report dated August 16. That claim is supported by a high-profile study earlier this year, which found the full effect of Trump's tariffs fell on consumers last year.
As a result, the tariffs have major implications for consumer spending - the largest component of US GDP - which has appeared fragile recently. While retail sales climbed 0.4% in July, consumer sentiment posted its sharpest monthly decline December 2012 in August, a University of Michigan survey found.JPMorgan's $1,000 estimate might prove conservative, given it was based on a projected tariff rate of 10% and Trump has imposed a 15% duty.Judging from the combative rhetoric from both sides, and their lack of progress in resolving the year-long dispute, the trade war's price tag for consumers could climb even higher.
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