[ad_1]
Despite multiple indications, last month, of a possible advance in trade negotiations, the United States and China proceeded on Sunday with their latest tariff increases on goods, potentially raising the prices that Americans pay to the United States. For some clothes, shoes, sporting goods and other consumer goods. holiday shopping.
The 15% US tax applies to about $ 112 billion of Chinese imports. In total, more than two-thirds of consumer goods imported from China by the United States are now subject to higher taxes. The administration had largely avoided touching consumer goods during its previous tariff increases.
But as the prices of many retail products are likely to increase, the Trump administration's decision threatens the main driver of the US economy: consumer spending. As companies cut investment spending and exports slow down in the face of sluggish global growth, US buyers have been a major asset to the economy.
Due to higher tariffs imposed by Trump, many US companies warned that they would be forced to pass on to their customers the higher prices they would pay on imports from China. Some companies may however decide to absorb higher costs rather than raising prices for their customers.
TRUMP LINK HONG KONG TO CRISIS OF COMMERCIAL WAR, CHINA AGAINST MILITARY WITHDRAWAL
A protester uses a shield to cover himself in front of the police in Hong Kong, Saturday, August 31, 2019. Protesters and police are held in Hong Kong on a street that crosses the bustling shopping area of Causeway Bay. (AP Photo / Jae C. Hong)
In August, Trump told the press that Apple's CEO, Tim Cook, had made a "very convincing argument" that the administration's tariffs on products assembled in China had had an unfair impact on the giant. California-based technology because its main rival of its manufacturing in South Korea and does not have to pay the tax.
Even more tariffs are looming on the horizon. On December 15, the Trump government is expected to impose a second round of tariffs of 15% – this time on imports of about $ 160 billion. If these rights come into effect, virtually all products imported from China will be covered, including all major Apple products.
In China, authorities began charging higher duties on US imports after noon on Sunday, according to employees who answered the phone in Beijing's customs offices and in Guangzhou's southern port. .
DIRECTOR GENERAL APPLE TIM COOK DECLARES TRUMP
This decision was taken although China announced last week that it wanted a "peaceful" end to the ongoing trade war with the United States, as Asian markets collapsed and the Chinese currency fell to its limits. lowest level in 11 years.
Fares of 10% and 5% apply to products ranging from frozen sweet corn and pork liver to marble and bicycle tires, the Chinese government announced earlier.
After Sunday's tariff increase, 87% of the textiles and clothing that the United States purchases from China and 52% of the shoes will be subject to import taxes.
The Chinese government released a list of US imports subject to penalties on December 15 if US tariff increases took effect. In total, Beijing said Sunday's penalties and December's planned increases would apply to $ 75 billion worth of US products.
The United States is at war with Washington and Beijing. They argue that China steals trade secrets from them and unfairly subsidizes its own companies in order to develop global competitors in high-tech sectors such as artificial intelligence and electric cars.
In an attempt to force Beijing to reform its business practices, the Trump government imposed import taxes on billions of dollars of Chinese imports, and China responded with tariffs on US exports.
Trump insisted that China pay the tariff itself. But in reality, economic studies have concluded that the costs of rights are borne by US businesses and consumers. Trump had indirectly recognized the impact of tariffs by deferring some of the taxes until December 15, after the holiday goods were already in the stores.
A study by J. P. Morgan revealed that Trump's tariffs would cost US households $ 1,000 a year. This study was conducted before Trump increased customs duties on December 1 and 15 from 10% to 15%.
The president also announced that the current tariffs of 25% on a separate group of 250 billion dollars of Chinese imports would rise to 30% on October 1.
This cost could weaken an already sluggish US economy. Although consumer spending grew the fastest in the last quarter in five years in the last quarter, the overall economy recorded modest annual growth of 2%, down from 3.1% in the last quarter. first three months of the year.
The economy is generally expected to slow further over the coming months, as lower revenue growth, slower business activity and higher prices due to depressed consumer spending . Companies have already reduced their investment spending and their exports have fallen in a context of slowing global growth.
Americans have already become more pessimistic. The University of Michigan Consumer Confidence Index, released Friday, recorded the largest decline since December 2012.
CLICK HERE TO GET THE FOX NEWS APP
"The data indicates that the erosion of consumer confidence due to pricing policies is now well under way," said Richard Curtin, who oversees the index.
Some retailers may pay for the price. Target confirmed to the Associated Press that it had warned its suppliers that it would not accept any cost increases arising from Chinese tariffs. But many small retailers will not have the power to negotiate to make such demands and will bear the costs to customers.
Joseph Wulfsohn of Fox News and the Associated Press contributed to this report.
[ad_2]
Source link