The National Retail Federation (NRF), reported that major US retail container ports saw an unusually high number of imports from China just before the new September 1st tariff took effect. NRF also reports expectations to see a surge again right before the next round of tariffs take effect in December. The December tariffs will impact electronic items such as, cell phones, laptops and video games. Just in time for holiday shopping.
According to NRF Vice President for Supply Chain and Customs Policy, Jonathan Gold, “Retailers are still trying to minimize the impact of the trade war on consumers by bringing in as much merchandise as they can before each new round of tariffs takes effect and drives up prices”.
Consumer spending fuels about 70 percent of the US economy, and for the most part consumers have been shielded from the earlier rounds of tariffs. However, all that is about to change as the September 1st tariff primarily targets consumer goods. In addition, 25 percent tariffs on $250 billion worth of imports already imposed over the past year will increase to 30 percent on October 1.
“That’s the same pattern we’ve seen over the past year, but we’re very quickly going to be at the point where virtually all consumer goods will be subject to these taxes on American families. The upcoming October talks with China are an opportunity to put a stop to this escalation, repeal the tariffs that have been imposed and focus on growing the economy,” said Gold.
What does this new tariff war mean for consumers?
Bottomline is potential for higher prices on thousands of household products such as clothes, sporting goods and shoes.
Economics professor at University of California, Davis, Katheryn Russ notes, “these tariffs mean a reduction in consumers’ real purchasing power. The amount of stuff you can buy with a given amount of money, say $100, is going to be a little bit less.”
And a JP Morgan study found that US tariffs will cost the average American household $1,000 a year, but the number could end up being higher since President Trump raised duties to 15% from 10%.
Savvy consumers are going to try to get their holiday shopping done sooner rather than later to avoid the price increases imposed by the new tariffs. Therefore, brands and retailers need to be ready for the early holiday shoppers.