The trade tension between the two leading economies is on the rise.
The US President, Donald Trump, has announced an impending increase in tariffs, starting with a 5% hike on $250 billion worth of Chinese imports into the US, set to come into effect on October 15th.
On September 1st, a new 15% tariff was imposed on $109 billion worth of Chinese imports, with further tariffs scheduled for October 15th, adding to the pressure. An additional 15% tariff on $155 billion of Chinese imports is slated for December 15th, which is likely to impact US consumers more significantly. In anticipation of these changes, JP Morgan sent a letter to its clients last week, outlining the expected price hikes on common Chinese imports. Overall, the tariff increases on December 15th are predicted to cost the average American household an extra $1000 per year.
To mitigate the effects of the US-China trade conflict, it is advisable to plan your purchases strategically. If you are considering buying new shoes, it would be wise to do so sooner rather than later. Since approximately 99% of shoes in the US are sourced from China, upcoming tariffs are expected to hit athletic footwear particularly hard. Apart from shoes, clothing items are also likely to see a price hike. Both children’s and adults’ clothing, along with athletic apparel, are expected to become more expensive once the tariffs take effect.
Considering the recent developments in the trade war, it comes as no surprise that tech products will also see a price increase. Cell phones and laptops are set to become pricier in 2020, making it less favorable to delay purchasing that new laptop. This includes Apple products, which have been in the spotlight as the company faced criticism from President Trump. Trump tweeted about Apple, emphasizing the need to “Make them in the USA, no Tariffs!” The cost of iPhones is anticipated to increase by 10% post the December 15th imposition of tariffs.
