President Trump’s threat to slap another $200 billion in tariffs on Chinese good could push up prices and cost U.S. consumers $6 billion, according to a new study by the National Retail Federation released Thursday.
The NRF study focuses on tariffs that will hit furniture and travel goods from China, arguing that even the threat of billions more in tariffs are causing retailers to raise prices and seek out other suppliers.
{mosads}Retailers are urging the Office of the U.S. Trade Representative to reject Trump’s plan to impose another $200 billion in tariffs on Chinese imports, which businesses have been testifying about all week in Washington.
“By now the administration should know something it questioned several months ago: Tariffs will not get China to change its unfair trade practices,” said Jonathan Gold, NRF’s vice president for supply chain and customs policy during testimony prepared for a USTR hearing on Thursday.
“Instead, these tariffs threaten to increase costs for American families and destroy the livelihoods of U.S. workers,” Gold said.
The Trump administration has proposed tariffs of at least 10 percent on $200 billion in Chinese imports and has said the tariffs might be as high as 25 percent.
The new analysis, prepared for NRF by the Trade Partnership, that found 25 percent tariffs on furniture from China would lead to American consumers paying $4.6 billion a year more for furniture even if retailers found new sourcing from foreign countries or U.S. furniture makers.
If Trump imposes 25 percent tariffs on travel goods, such as luggage and handbags, it would cost consumers $1.2 billion a year even if they no longer came from China.
Overall, consumers would pay between $2.1 billion and $4.6 billion additional for furniture and between $578 million and $1.2 billion additional for travel goods, the study said.
At 10 percent, the effects would be smaller but still significant to consumers pocketbooks.
“The threat that these tariffs could be imposed, and even expanded to include all consumer goods imported from China, has already started a scramble among importers to find alternative sources of supply, including in the United States,” Gold said.
“While you may think this is a positive development, the administration needs to know that the scramble is already bidding up prices for consumer products from all possible alternative manufacturers,” he said.
“Therefore, even if the administration decides not to impose the tariffs, higher prices are already on the horizon for American families.”