Experts estimate the first consumer losses from a trade war with China

Goldman Sachs first calculated the loss of American consumers from trade war with China. The calculations included data for the first six months of high duties, without taking into account the recent increases and the tramp yesterday and the response of China.

According to the Bureau of labor statistics, the consumer price index in the U.S. for the 12 months ended in April, excluding the volatile sectors of food and energy, rose 2.1%. This is little changed compared with the previous four months when the consumer price index showed a 12 month increase from 2.0% to 2.2%. In its report, the experts grouped the nine categories of products and services for which prices increased «much more» than others.

Experts estimate the first consumer losses from a trade war with Boersbroek/CC

According to the report, the additional tariff costs that the consumers pay in the second half of last year, was determined on an annual basis and totaled the cost for a family is over $ 400 dollars.

According to Professor of Economics at Columbia University David Weinstein, if additional tariffs announced by the administration trump last week, will be introduced and will operate throughout the year, this annual cost to consumers is likely to double.


Tariffs to date has affected the construction industry and have added $1 billion to the cost of housing in the United States. This figure could rise to $ 2.5 billion with the recent increase in tariffs by the administration of the trump. The materials that are affected by the US tariffs on Chinese imports include granite, cement, vinyl flooring, ceramic tile and stainless steel.

Robert Dietz, group chief economist, predicted in an email that the increasing cost of materials «will be borne by the buyers, tenants and landlords» in the form of higher prices.


About 82% of suitcases and bags sold in the U.S. is imported from China, Luggage and accessories were among the items in September last, the effective initial rate of 10%. Many retailers in anticipation of the holidays, made with large orders and for the most part were able to hold the price line during the winter season. But since the beginning of this year the retail price of bags increased by 5-10%. And they can jump another 10-15%, if the new 25% tariff on Chinese imports will remain in force. The same applies to backpacks, which have already increased by 5% at the retail level this year and may rise by another 10-15%.

While the share of large chain stores such as Walmart, accounting for about half of sales Luggage in the USA, the other half is sold by small chains and specialized retailers, who are not able to offset the additional costs» of rates and to keep prices stable.


After the administration of trump announced tariffs on imported large washing machine in January of last year, their price tag has increased by approximately 10%, according to working paper of Centre for economic policy research. This change occurred despite the fact that the price index of appliances has declined steadily since 2013. After the announcement of the rate index began to grow rapidly.

The average price for a washing machine before the announcement of the rate was 749 dollars, as published in the April article, co-authored by the researchers from the Federal research Council, the University of Chicago and National Bureau of economic research. Rates added $ 86, the document says.


The share of Chinese goods, parts or materials account for about 33% of the sector computers and electronics and from about 28% to 30% of electrical equipment, says John Mazerolle, Director of pricing and procurement in the company at the market research IHS Markit.

«You’re talking about significant fare… in large parts of the US market», — he said. «It is expected that you will begin to see the pain, feel… in these areas in the first place.»


While traditional toys do not yet apply the existing rates, they can change if these threats become a policy, says Rebecca Mond, Vice President, trade group for the Federal government. «That’s when we will see how consumer prices affect the toy, and it could happen this holiday season,» she said.

Chinese action

Announced yesterday, China’s response is difficult to predict in terms of the impact on consumer prices, but they will cause problems in the economy, as it will create problems with the implementation and profitability of corporations, and therefore may have an impact on the income of employees and on tax deductions.

June 1, 2019 the import duties on goods from the US will rise by about $60 billion additional duties will be covered by more than 5000 items:

Among the American goods, which will be applied fee of 25% — liquefied natural gas (LNG). Under the 25-cent toll were American fish and meat, coffee and tea, peanut butter, fruit juices and alcoholic beverages, including wine, follows from the message of the Chinese Ministry of Finance. Also, this rate will be applied on goods such as chemicals, including ammonia and titanium oxide; natural and enriched uranium; mineral fertilizers (nitrogen, phosphate, potash), household chemicals (shampoos, Soaps), rubber products, condoms, paper & cardboard, fabrics, textiles, some clothes and shoes.