“Depending on the nature and the rate and how it’s structured, it could be pretty substantial,” Clark Packard, a research fellow at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies, told FOX Business about the impact of tariffs on consumer prices. “He talked on the campaign trail about a 10% to 20% tariff on all imports, and then a special duty of like 60% on imports from China. If that were to go into effect, you know it would certainly raise consumer prices.”
“I’ve seen a study showing that the price of a laptop, for example, would increase by about $350 and a smartphone by about $200,” Packard said. “That assumes full pass through of the tariff cost to a retail buyer, but a lot of the best economic research shows that about 90% of the cost of a tariff gets pushed back to consumers.”
Dr. Madhav Durbha, group VP of CPG and manufacturing at RELEX, told FOX Business, “Items like avocados, mangoes, and other fresh produce heavily sourced from Mexico are highly vulnerable to tariffs. Geographic and environmental constraints make it difficult to shift production, and these tariffs would translate directly into higher prices for consumers at grocery stores.”
Durbha added that the U.S. imports pharmaceutical ingredients used in producing everyday medications from China and that tariffs on such imports “could increase drug costs for consumers and disrupt supply chains, creating ripple effects across the health care industry.”
He said that while many apparel and footwear brands have adopted the “China plus one” strategy of diversifying production to countries like Vietnam and Cambodia, tariffs on China could potentially increase costs on those goods for consumers.
Durbha added that a similar dynamic has played out with consumer electronics, like laptops and smartphones, which could be subject to price hikes or availability delays despite more production moving from China to countries like India and Vietnam.
Packard also noted that imposing tariffs to tax imported goods would also have an impact on American manufacturers and exporters, because foreign countries are likely to impose retaliatory tariffs on U.S. exports in response.
He explained that “40% to 50% of all imports are intermediate inputs that American firms use to make their products more globally competitive, and so when you start raising the price of inputs that American firms are buying abroad, you’re going to make the finished product less competitive in global markets.”
“When you impose a tariff, you’re going to see retaliation from foreign governments,” Packard explained. “So not only are you a producer in the U.S. and your prices have increased because the goods you need have increased in price, you’re going to see higher tariff barriers when you go to export the product as well.”
This could reduce our exports and affect American businesses and jobs as well.
https://www.foxbusiness.com/politics/trumps-proposed-tariffs-what-consumer-products-could-impacted
3 Major Retailers Who Will Raise Prices Immediately Under Trump — Tariffs Play Key Role
A problem with tariffs — that is, with imposing taxes upon the producers of foreign goods, from cars to farmers to tech companies — is that they offset those taxes by increasing the prices of their goods to the American retailers who sell them. In turn, those retailers then must sell the items at a higher cost to make up that price difference.
As a result of Trump’s promise to bring high tariffs back with his incoming administration (specifically, he has suggested a general 10 to 20% tariff on all imports from all foreign countries, as well as a 60 to 100% tariff on Chinese imports), many companies are preparing to increase prices.
In fact, three major retailers have already announced that their prices will increase:
AutoZone
As reported by Business Insider, AutoZone CEO Philip Daniele told analysts on an earnings call for the auto-parts company that if the president-elect enacts his proposed tariffs policy, “We will pass those tariff costs back to the consumer.”
Columbia Sportswear
Columbia Sportswear CEO Tim Boyle followed suit, announcing during his company’s earnings call in October that “trade wars are not good and not easy to win,” adding in a comment that Columbia Sportswear was “set to raise prices” as a result of Trump’s tariffs.
Stanley Black & Decker
“Coming out of the gate, there would be price increases associated with tariffs that we put into the market” — that’s how Stanley Black & Decker CEO Donald Allen described his company’s response to Trump’s tariff proposals in an October earnings call.
While these companies are the first to publicly announce tariff price-hikes, they are not expected to be the last, with large retailers like Target and Walmart, as well as grocers, expected to feel the pressure to increase prices in the face of high tariffs.
https://www.foxbusiness.com/politics/trumps-proposed-tariffs-what-consumer-products-could-impacted
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