President Donald Trump tweeted on Thursday that a new tariff on 300 billion dollars worth of consumer goods imported from China will be established. This new policy, if implemented, will not only have a lasting impact on the global economy, but also on American consumers. A multitude of different consumer good manufacturers have already felt the impact of the impending tariff, such as Best Buy dropping 11% after Trump tweeted his decision. Despite the trade war already causing major issues for consumer electronic companies, the consumer good that will most be impacted by the new tariff are shoes.
According to the Footwear Distributors & Retailers of America, 70% of all shoes sold in the US are manufactured and imported from China. With a 10 percent tariff on shoes, it will be hard for shoe retailers to maintain a low price for their products and will likely be forced to pass the cost of the duties on to the consumer.
Likewise, vertically integrated retail companies that manufacture their goods by themselves, such as Macy’s, will receive the full impact of the tariff because they do not have a vendor to split the cost with. Unfortunately for the American consumer, this will mark an increase in price for numerous inelastic goods.
The increasing economic tension with China and Trumps desire to bring American companies manufacturing bases back to the United States is not only limiting global economic growth, but also putting a great economic burden on the citizens and companies Trump is attempting to benefit from these policies. After the tariff is implemented, the consumer will soon see greatly increased prices in the most commonly purchased consumer goods, such as shoes, clothes, toys, and more.
Keith Knutsson of Integrale Advisors commented that, “The trade war has not only poised a massive threat to the global economy, but Trump’s continual pressure on Chinese goods is now starting to hurt the pockets of the American citizens.”