United States consumers could soon feel the impact of a trade fight between President Donald Trump and China, Reuters news reported.
Trump is looking to place tariffs on another $100 billion in imports, and he may have to target “cell phones, computers, toys, clothing, footwear, furniture and other consumer goods," to do it. That could end up raising prices at U.S. retailers such as Walmart and Apple.
A new list of taxable Chinese imports is expected to be released within days, according to the report.
“There is no way to avoid consumer products when you’re thinking about how to hit $100 billion worth of imports coming from China,” Hun Quach, vice president of international trade for the Retail Industry Leaders Association, told Reuters. The association represents U.S. retailers.
Many involve small-scale production and "a wide range of goods sold in U.S. chain stores such as Wal-Mart, including clothing, pet food and lighting fixtures,” Reuters reported.
Other countries may be able to supply the goods, but it wouldn’t happen overnight. Disruptions could occur for retailers with long-established supply chains with China.
What is the impact?
The exact impact of any new tariffs is difficult to calculate because so many variables are involved, the report stated. Companies may choose to absorb additional costs or shift production from China to other countries, which would limit the impact on American consumers.
Trump imposed import tariffs on solar panels and washing machines in January. He added steel and aluminum in March, in addition to about $50 billion in other goods. Washing machines imported by LG Electronics sustained a 20 percent tariff in January. That prompted the company to raise prices by about $50 per machine.
China responded by announcing a list of U.S. goods that would be subject to tariffs.
Then, earlier this month, Trump asked the U.S. Trade Representative to consider another $100 billion in levies. U.S. imports from China totaled $506 billion last year, according to Reuters. That creates a challenge in meeting the $100 billion figure.
Is it really hurting China?
The $100 billion could easily come from consumer electronics($44 billion), computer equipment ($37 billion), and voice, image and data recorders ($22 billion), Reuters reported.
In addition to China, U.S. allies South Korea, Japan and Taiwan – which supply cell phone parts for companies like Apple Inc. - would feel the impact.
Many consumer electronics depend on the export of American semiconductors, software “and other inputs to China for assembly before being imported back to the United States,” Reuters reported.
“You end up shooting yourself in the foot, shooting your allies in the foot, and maybe you wound China’s big toe,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics.