Tariff hike to cost US consumers more on clothing
Print Edition
The threatened 25 percent tariff hike on an additional US$300 billion worth of Chinese imports would make US consumers pay US$4.4 billion more each year for apparel, a study released on Friday showed.
The study estimates the impact of proposed tariff increases by the United States on categories including apparel, footwear, toys, household appliances, furniture, travel goods and television.
It was commissioned by the National Retail Federation, a renowned US retailer association, and was prepared by the Trade Partnership Worldwide.
Low-income families would be particularly affected when buying apparel, the study showed.
They spend three times as much of their after-tax income on apparel and services as do high-income households.
While US apparel manufacturers would see revenues grow by about US$620 million, each new dollar of revenue costs consumers more than US$7 in new out- of-pocket expenses.
“After accounting for domestic manufacturing gains and new tariff revenue, the result is a net US$2.2 billion loss for the US economy, with the burden carried by US consumers,” the report said.
Apart from apparel, US consumers would pay US$2.5 billion more for footwear, US$3.7 billion more for toys and US$1.6 billion more for household appliances. The rise in tariffs would also force purchasers of furniture to pay US$4.6 billion more, and of travel goods, US$1.2 billion more.
As for the toy industry, China is the- largest supplier. The report said China accounts for more than 88 percent of the supply of toys to the US market while the US producers are estimated to account for less than 1 percent. The total value of toy imports from China is 25 times greater than the total value of toy imports from the next largest foreign source of supply, Mexico, said the report.
“Overall US prices for toys generally (from all sources combined) would rise by 17 percent. As a result, US consumers are forced to reduce overall purchases by 32 percent,” the report estimated.
As part of monthly consumer surveys conducted by Prosper Insights & Analytics, NRF has been tracking the public’s growing concern over trade disputes between the US and its major trading partners.
The June survey found 81 percent of consumers are “concerned the ongoing trade war will cause prices to increase,” as there’s already a 12 percent increase since November 2018, according to the federation.
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