You may have heard about tariffs being slapped on Chinese companies. Such tariffs may result in higher export taxes on goods made in China and then shipped to American consumers.
Under orders by President Donald Trump, the U.S. government is set to impose a 25% tariff on $16 billion worth of Chinese goods. This bumps up the grand total of goods subject to tariffs to a whopping $50 billion.
What’s more, another $200 billion worth of Chinese goods may be subject to tariffs. If that’s the case, then 50% of all goods imported to the U.S. from China will be subject to tariffs.
What does this mean for the rest of us?
Everyday goods could get more expensive
Higher tariffs would make it more expensive for Chinese manufacturers to import their goods to us. To offset costs, it’s possible that manufacturers would eventually raise prices on products for you, the consumer.
Think about all your recent Amazon purchases.
How many were “Made in China”? Tariffs could spike prices on everything from sporting equipment, fitness trackers, car seats, and handbags, to business equipment such as smoothie machines.
Will tariffs help or hurt American businesses?
What hasn’t been discussed widely is that tariffs may also threaten the livelihood of many American businesses.
Many U.S. companies rely on foreign materials, including those manufactured in China. Huffy, the largest bicycle brand in the U.S., sells four million Chinese-made bikes every year; a 25% tariff on their merchandise would hamper the company’s internal costs.
Only time will tell how this trade war pans out and its net impact on American businesses and consumers.