NEW YORK, May 24 — The newest round of US tariffs on Chinese imports will cost the typical American household US$831 (RM3,483.47) annually, researchers said yesterday, as the Trump administration came under growing political pressure over its trade war with China.
Washington this month hiked existing tariffs on US$200 billion in Chinese goods to 25 per cent from 10 per cent, prompting Beijing to retaliate with its own levies on US imports, as talks to end a 10-month trade war between the world’s two largest economies stalled.
Research published by the New York Federal Reserve Bank estimated that as tariffs grow larger, importers have more of an incentive to switch to goods from more expensive countries. That could end up reducing the revenue the United States is able to collect from its tariffs on Chinese goods, the authors of the report wrote.
While many economists expect the tariffs will push US consumer prices higher, US Treasury Secretary Steven Mnuchin told lawmakers on Wednesday that rising tariffs on Chinese imports will not lead to significant cost increases for US families.
A US lawmaker from Iowa, one of the states considered especially vulnerable to the US-China trade war, pressed Mnuchin yesterday to explain his views.
“It appears beyond evident that consumers will pay this price,” Representative Cindy Axne, a Democrat, said in a letter a day after Mnuchin appeared before the House of Representatives’ Financial Services Committee.
In her letter, which was seen by Reuters, Axne asked Mnuchin to share the Treasury’s internal research on how the tariffs could affect consumer prices.
Mnuchin has said some companies would source products from countries other than China, potentially shielding US consumers from price hikes, and that currency effects, reduction in profit margins and other factors would also mitigate the impact of prices. — Reuters