Tariff war about to hit home

More than a year into the U.S.-China trade dispute, American consumers, who have been largely shielded from previous rounds of tariffs, are about to find themselves squarely in the crosshairs for the first time. According to research from JP Morgan, here’s what the average American family could expect.

$1,000

What the average household faces up to in additional costs each year from tariffs.

70

Percent of the U.S. economy fueled by consumer spending.

10%

Tariffs the U.S. will levy on roughly on $112 billion in Chinese goods, which will take effect Sept. 1.

$1,500

The amount researchers estimate consumers’ annual costs could go as high as if the tariffs are raised to 25%, as President Donald Trump has warned.

What it means

For consumers, the tariffs fallout will be big enough to erase the benefits of Trump’s 2017 tax cuts, which boosted many American families’ takehome pay by several hundred dollars last year, according to the Tax Policy Center. Because the tariffs would impact households in the run-up to the 2020 Election, JP Morgan strategists predict there is a “good chance” they will be reversed.

Why it matters

Consumers have been largely shielded from previous rounds of tariffs, which have left businesses

reeling and upended global supply chains. But that’s about to change with the 10 percent levies on Chinese imports. Those tariffs will primarily target consumer goods.

Previously

Last week, Trump publicly acknowledged, for the first time, that American families will bear some of the burden.

Amid growing concern that the tariffs could damage the economy, Trump abruptly announced he would delay tariffs on certain popular products like laptops, footwear and video games — about two-thirds of the impacted items — until mid-December.

“What we’ve done is we’ve delayed it so they won’t be relevant in the Christmas shopping season,” Trump told reporters. “Just in case they might have an impact on people.”

AP 2018 Consumers have been largely shielded from previous rounds of tariffs, which have left businesses reeling and upended global supply chains. But that’s about to change with the 10 percent levies on Chinese imports. Those tariffs will primarily target consumer goods.