News & Events

It’s “wait and see” on impact of Chinese tariffs

By:  Ed Patton

With President Donald Trump’s additional $200 billion dollars in trade tariffs on China now in effect, the focus turns to their impact. The tariffs, which began on Monday, encompass a wide variety of goods, ranging from seafood and vegetables to auto parts and construction material. And while they began at 10 percent, tariffs will increase to 25 percent on January 1, 2019. Effects of the tariffs will vary depending on what is purchased, with consumers seeing greater price increases on more expensive items such as televisions, cars, or homes and home renovations, due to increased costs on construction materials.

And businesses, some of which have been dealing with increased taxes on imports like steel and aluminum for months, will see costs increase further. The intent of tariffs is to help domestic companies by making their domestic product more affordable than the foreign alternative, but they don’t always have the desired effect. Manufacturers can end up being forced to lay off workers or increase prices for customers to offset their own price increases.

Whether President Trump’s latest tariffs on China will do anything to address the trade imbalance between the two nations remains to be seen; China responded by imposing penalties on $60 billion of U.S. products.