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Graphic shows potential effects of U.S.-China trade dispute on American consumers.
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BUSINESS

Toll of Trump’s trade war mounts

By Duncan Mil

August 5, 2019 - In a stark escalation of the U.S.-China trade war, Beijing weakened the yuan and told state-owned companies to suspend imports of U.S. agricultural products.

The move is in response to U.S. President Donald Trump’s announcement that he will impose a 10% tariff on a further $300 billion of Chinese imports from next month. The levy is in addition to 25% tariffs on $250 billion of Chinese imports.

“We’re taking in many billions of dollars. There’s been absolutely no inflation, and frankly, it hasn’t cost our consumer anything. It cost China,” Trump said while introducing the September levies.

But economists say that’s not how tariffs work, and that Americans are the ones footing the bill so far.

“Retaliatory tariffs, whether 10% or 25%, are bad policy,” said Gary Shapiro, president and CEO, Consumer Technology Association, responding to the latest levies. Tariffs are costing the U.S. tech sector $1.3 billion a month.

The American Action Forum has warned that a 25 per cent tariff on all consumer goods from China could raise prices by $38.2 billion per year.

Consumers will pay $4.4bn more for apparel, $2.5bn more for footwear, $1.6bn more for household appliances, and $4.6bn more for furniture, according to the National Retail Federation.

Government figures show that the $20.8bn of revenue collected from tariffs on Chinese imports up to July is less than the $28bn Trump is spending to support farmers hurt by the trade war.

Even the White House’s “Economic Report of the President,” chapter 10, page 496, warns that tariffs increase “costs paid by consumers in the form of higher prices.” However, Trump’s indifference to the printed word is well known.

Sources
PUBLISHED: 05/08/2019; STORY: Graphic News; PICTURES: Associated Press
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