Former President Donald Trump's proposals for universal tariffs could cause prices of clothing, toys, furniture, appliances, shoes and travel items to skyrocket, in accordance with a brand new report within the American newspaper National Retail Association.
The study, released on the eve of Election Day, adds to the array of economic and industry analyzes warning of the inflationary impact of the Republican presidential candidate's tough trade approach.
Trump has said he would impose a ten% or 20% tariff on all imports across the board. He also envisioned a very high China rate of between 60% and 100%.
In each cases, the NRF found that the impact of Trump's tariffs would result in “dramatic” double-digit price spikes in nearly all six retail categories studied by the trade group.
For example, the associated fee of clothing could rise between 12.5% and 20.6%, the evaluation found. That means an $80 pair of men's jeans would cost between $90 and $96 as a substitute. A $100 coat? That would cost between $112 and $121.
These latest prices would strain consumer budgets, particularly for low-income households, which spend thrice as much of their monthly budget on clothing as high-income households, the study said Bureau of Labor Statistics.
The report found that toys could see the most important price spikes: between 36.3% and 55.8%. The price of a $200 crib would also rise to $213 to $219.
At the macro level, these price increases would also undermine consumer spending. The report found that if Trump imposed each universal tariffs and particularly high China tariffs, the costlier retail goods would end in a loss of buying power of $46 billion.
“Broad-based tariffs of the magnitude proposed by former President Trump will represent a massive tax increase on American families as they pay more for all imports, reducing their purchasing power and thus placing a heavy burden on their spending and the overall economy,” Chief Moody's said economist Mark Zandi told CNBC.
The report didn’t keep in mind Trump's latest proposal announced Monday to impose a 25% tariff on Mexico if the country doesn’t adopt stricter border regulations, which he announced at his rally in Raleigh, North Carolina.
Vice President Kamala Harris has seized on economic criticism of Trump's sweeping tariff plans, calling them a “Trump sales tax” on American consumers. Instead, she favors a more targeted approach to the tasks.
However, many citizens are responding positively to Trump's tariff proposals because they imagine years of free trade have decimated factory towns across America.
However, Trump's tariffs during his first term as president, including tariffs on foreign metals and washing machines, have did not increase the overall variety of jobs within the relevant industries, a nonpartisan finding Working paper found.
“If higher taxes are imposed on these imports from China, their production will shift to other, less developed countries,” said Mary Lovely, a senior fellow on the Peterson Institute for International Economics.
Given the relatively higher wages within the U.S., Lovely said, “it is very unlikely that many jobs will be created in these industries.”
This implies that Americans is not going to see additional jobs, but moderately that prices will rise.
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