A report by the National Retail Federation (NRF) warns that US consumers could lose as much as $31 billion if tariffs on Chinese goods are increased. The NRF study finds that low-income households would be disproportionately affected.The report also reveals that footwear could become nearly 5% more expensive, furniture could rise by 4%, and apparel by almost 2%.
Tariffs are often used to protect domestic industries from foreign competition, but they can also have a number of negative consequences. For example, tariffs can raise prices for consumers, reduce economic growth, and lead to job losses.
The Trump administration has imposed tariffs on billions of dollars worth of Chinese goods in an effort to reduce the US trade deficit with China. However, the tariffs have had a negative impact on the US economy, raising prices for consumers and businesses.
The tariffs have also led to retaliatory tariffs from China, which have further harmed the US economy. The Peterson Institute for International Economics (PIIE) estimates that the US-China trade war has cost the US economy $24 billion per year and led to the loss of 195,000 jobs.
The NRF report is based on a survey of 1,000 US consumers. The survey found that 70% of consumers are concerned about the impact of tariffs on prices. The survey also found that 60% of consumers are less likely to purchase goods that are subject to tariffs.
The report is consistent with other studies on the impact of tariffs. A study by the PIIE found that tariffs on Chinese goods would cost the US economy $31 billion per year and lead to the loss of 275,000 jobs.
The tariffs are also harming US businesses, which are forced to pay higher prices for inputs and pass those costs on to consumers. For example, a study by the National Association of Manufacturers found that tariffs on Chinese goods have increased the cost of manufacturing in the US by an average of 2.3%.
Impact on Low-Income Households
The NRF report found that low-income households would be disproportionately affected by higher tariffs. This is because low-income households spend a larger share of their income on goods that are subject to tariffs.
For example, the report found that low-income households spend an average of 13% of their income on apparel, while high-income households spend an average of 5% of their income on apparel.
As a result of higher tariffs, low-income households would have to spend more money on goods, leaving them with less money for other essential expenses, such as food and housing.