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Trump’s trade war is about to pack a big punch to your wallet

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NEW YORK TIMES / 2018

The Apple store in the SoHo neighborhood of New York. Today, the Trump administration increased tariffs that President Donald Trump imposed last year on $200 billion worth of Chinese imports to 25%, from their previous rate of 10%, meaning that consumers could bear the brunt of higher costs.

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NEW YORK TIMES

A customer leaves a grocery store in New York on Jan. 15. Today, the Trump administration increased tariffs that President Donald Trump imposed last year on $200 billion worth of Chinese imports to 25%, from their previous rate of 10%, meaning that consumers could bear the brunt of higher costs.

The more President Donald Trump escalates his trade war with China, the more U.S. shoppers will notice higher prices in their favorite grocery stores, hardware shops and big-box retailers.

Today, the Trump administration increased tariffs that Trump imposed last year on $200 billion worth of Chinese imports to 25%, from their previous rate of 10%.

The official $200 billion tariff list starts with “frozen retail cuts of meat of swine” and ends with “monopods, bipods, tripods and similar articles of aluminum.” In between are 194 pages of products that you can find on store shelves across the country.

Economists and business owners expect the tariff increases to hit consumers in two ways. Stores that were already passing on the cost of the 10% tariffs will now pass on a higher cost. And businesses large and small that previously tried to shield customers from the smaller tariffs will now find it almost impossible to avoid passing some or all of that tax on to Americans who buy their products.

Trump’s first two waves of tariffs, which covered $50 billion of Chinese imports, largely shielded customers from price increases by targeting goods that businesses, not individuals, tend to buy. The $200 billion wave still protected some hot consumer items — particularly clothing — from tariffs. After its initial proposal, administration officials modified it to exclude other necessities, like highchairs, infant walkers and other baby items.

But those tariffs spilled into stores nonetheless. A quarter of the tariffs were placed on items that researchers at the Peterson Institute for International Economics classified as consumer goods. They include $11.3 billion in furniture imports, $9.2 billion in auto parts and $6.6 billion in luggage. In contrast to previous rounds of tariffs, the U.S. trade representative has not made any of those products eligible for exclusions that would exempt them from the tariffs.

The National Retail Federation warned this week that consumers would bear the costs of an abrupt increase in the taxes on those goods.

“A sudden tariff increase with less than a week’s notice would severely disrupt U.S. businesses, especially small companies that have limited resources to mitigate the impact,” said David French, the federation’s senior vice president for government relations. “If the administration follows through on this threat, American consumers will face higher prices, and U.S. jobs will be lost.”

Among the items that might suddenly get more expensive is outdoor gear, like travel bags, backpacks and the knit fabric used in fleece vests.

Dog collars, baseball mitts and ski gloves will also face a 25% tariff, along with sledgehammers and saw blades. Almost every kind of lighting fixture that most U.S. stores sell is imported from China, and all are on the list.

Also on the tariff list are toilet paper, art supplies, ceramic tiles, windshield glass and antiques that are more than 100 years old. Plus:

— CD cases, CD players, cassette tapes and cassette players

— Apparel made from reptile leather

— Wooden shingles

— Dyed knitted or crocheted cotton fabrics

— Anvils

— Mattress supports

— Christmas tree lights

More than 1,000 of the 6,000 items on the list are chemicals, many of them industrial, according to an analysis by Panjiva.

Some items are being hit twice by Trump’s tariffs — those made out of imported steel, which he hit with a 25% tariff last year, and aluminum, which he hit with a 10% tariff. The auto parts on the list could be subject to double tariffs of their own if Trump follows through with a long-standing threat to impose new tariffs on imported cars and trucks — and their parts — this year.

Almost 1,000 other products are things you eat or drink. They include vegetables like cabbage, kale, carrots and beets, along with hundreds of types of fish, though industry lobbying removed some Alaskan-caught fish that are exported to China for processing and then reimported to the United States. Other products for your pantry include:

— Mustard seeds

— Stuffed pasta, whether cooked or otherwise prepared or not

— Olives (not green), in a saline solution, in airtight containers of glass or metal but not canned

— Strawberry jam

— Rice wine or sake

— Soy sauce

The items most likely to sock U.S. consumers’ wallets are computers and couches. Peterson researchers estimated that the tariffs hit more than $23 billion worth of computers and computer parts. A new computer or sofa is a major purchase for most Americans, and a 25% tariff could force many to seek out cheaper brands or delay the purchase.

It seems almost impossible that stores will absorb the full margin of those taxes by accepting lower profits — even those that have been buoyed by strong sales growth and Trump’s business tax cuts.

U.S. consumers might not have much choice but to pay more: For nearly $100 billion of the products targeted, Panjiva estimates, China supplies more than half the imports that Americans buy.

The worst may be yet to come. Trump said Thursday that he was preparing another round of tariffs, on what could be all remaining imports from China. They would presumably hit clothing, shoes and other goods that the administration has worked to leave off the lists until now. It would be impossible for shoppers to miss it.

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