Ongoing trade disputes between the United States and China, and the resulting tariffs, may mean that you're paying more in the second half of 2019 for everything from school supplies to gifts for the winter holidays.
Tariffs are taxes placed on imported products. Companies importing affected products pay the tariff and, in turn, must often charge higher prices for the products to cover the higher importing costs. "At the end of the day, the tariffs are eaten by...the American consuming public," Richard Ebeling, an economics professor at The Citadel in Charleston, South Carolina, told Grow earlier this year, when the U.S. raised existing tariffs from 10% to 25% on $200 billion worth of Chinese goods.
Last week, the Trump administration announced a new 10% tariff on $300 billion in Chinese goods that would kick in on September 1.
Here are four specific product categories where experts warn you could see higher prices this fall, especially as new tariffs kick in:
- Toys. The impact here could be substantial, depending on what your kids put on their wish lists. One research analyst told CNBC that prices may only need to go up around 5% to offset increased costs but another toy executive told the Washington Post that consumers could end up paying as much as 40% more.
- Electronics. Cellphones, tablets, laptops, and video game consoles could see price hikes of 20% or more, according to the Consumer Technology Association.
- Apparel. The Trade Partnership Worldwide report estimates that, due to existing tariffs, consumers will already spend $4.4 billion more on clothing and shoes. Earlier this year, in reference to the 25% tariff, the Halloween & Costume Association warned that its members, mostly small businesses, "simply cannot absorb this kind of increase in product cost" without passing it on to shoppers. If additional tariffs are levied, those could result in even higher prices.
- Food. Loading up the table for Thanksgiving could be more expensive this year as prices on produce, beans, and nuts, among other foods, could increase.
Current tariffs may mean a family of four could pay an extra $767 to $2,389 each year for the products they already buy, according to a February study from Trade Partnership Worldwide. And in June, the research firm warned that additional tariffs "would result in prices higher than many consumers would be willing to pay."
You may feel the impact of all these tariffs most as your spending ramps up in the fall. A quarter of all retail sales occur during the holiday shopping season, according to Deloitte. Last year, the average household expected to spend $684.79 on back to school supplies, $86.79 on Halloween, and $1,007.24 on the winter holidays, according to the National Retail Federation, while the American Farm Bureau puts average spending on Thanksgiving dinner at $48.90.
If the dispute isn't resolved by early September, you should prepare for prices to go up. That may mean cutting your spending in advance or otherwise retooling your budget to anticipate a costlier shopping season. You may also want to hold off on any bigger purchases, like appliances, as they may jump considerably in price, or consider buying them secondhand.
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