by Sharelle Burt
November 9, 2024
Think this is a good plan?
U.S. retailers’ alliance to foreign suppliers may potentially lead to higher prices for a range of products, thanks to Donald Trump winning the White House and his proposed import tariffs, CBS News reports.
In a report released by the National Retail Federation (NRF) on Nov. 4, American consumers can expect to lose anywhere between $46 billion and $78 billion in spending power on products such as apparel, toys, furniture, household appliances, footwear and travel goods over the next few years because of the tariffs. NRF Vice President of Supply Chain and Customs Policy Jonathan Gold released a statement explaining what a tariff is and how it affects companies. “A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers’ pockets through higher prices,” Gold said.
“Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices.”
Examples include a pair of sneakers for $50 increasing to prices ranging between $59 and $64 or a $2,000 mattress and box spring set going for $2,190.
The introduction of tariffs isn’t a first-time Trump proposal. During his first term, his administration set sights on tariffs up to 25% for over $360 billion in products from China. The Biden-Harris administration kept most of those tariffs and added additional ones onto Chinese electric cars and microchips.
Under a Trump-Vance reign, the team has plans to embed a 60% tax on China-produced goods and a 10% to 20% levy on the $3 trillion in foreign goods the U.S. imports per year. During the campaign trail, Trump vowed to reduce inflation but U.S. Treasury Secretary Janet Yellen issued a warning that since the tariffs would be paid mostly would only increase it. “A consistent theoretical and empirical finding in economics is that domestic consumers and domestic firms bear the burden of a tariff, not the foreign country,” the Budget Lab at Yale University said in a mid-October 2024 analysis.
However, Trump claims tariffs will benefit the U.S economy in numerous ways like encouraging countries to negotiate more successful trade deals and limiting other counties from “dumping” their products in the States at under-market prices, according to USA Today. Another reason is to motivate nations to decrease their tariffs on shipments into their countries from the U.S.
The four-time criminally indicted President-elect has accused other countries of pushing much higher tariffs on imports than the U.S. in addition to criticizing trade deals — like NAFTA — that have led to more foreign imports into the country than exports from the U.S. to other countries. In 2020, the Trump administration replaced NAFTA with the United States-Mexico-Canada Agreement.
For the time being, it is unclear on the timeline of when or if the incoming administration will begin to tighten tariffs as the process requires legislation to increase the levies, which could take up to a year.
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