President-elect Donald Trump's plan to impose blanket tariffs on all imports and a 60 percent duty on goods from China has several major businesses gearing up to raise consumer prices, per the Washington Post.
Trump has argued that his policy will increase the manufacturing and purchasing of U.S.-made products. According to Trump, companies moving their production back to the U.S. will be a less costly option than shipping goods from abroad.
“The higher the tariff, the more likely it is that the company will come into the United States and build a factory in the United States, so it doesn’t have to pay the tariff,” Trump told Bloomberg last month. “The (exporting) countries will pay.”
However, American companies ordering retail goods, manufacturing components, or raw materials from abroad usually pay tariffs to U.S. authorities and not their foreign suppliers, per the Washington Post. Companies then pass the majority of these additional costs to the consumer.
According to the Post, companies relying on imports have already started to prepare price hikes for their consumers.
These companies include makers and retailers of clothing, footwear, baby products, auto parts, and hardware. Added costs from Trump's tariffs will force these companies to raise their prices and likely exasperate shoppers following years of inflation.
According to experts, the average household could spend an additional $1,700 to nearly $4,000 annually due to tariff expenses.
Some businesses started ordering large volumes of imports to gear up for a potential Trump presidency. Others have begun replacing suppliers based in China with new partners in other nations where fewer duties may be applied.
“We’re set to raise prices,” Timothy Boyle, chief executive of Columbia Sportswear, told the Post. “We’re buying stuff today for delivery next fall. So we’re just going to deal with it and we’ll just raise the prices.… It’s going to be very, very difficult to keep products affordable for Americans.”
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