Consumers 'start to see the pain' of the trade war
Now more than a year into the US-China trade war, US consumers have so far been largely shielded from the negative effect of tariff rates. But a large Wall Street investment bank says everything is about to change and has the data to prove it.
<p class = "canvas-atom canvas-text Mb (1[ads1].0em) Mb (0) – sm Mt (0.8 em) – sm" type = "text" content = "" I think you're starting to see the pain, "said Bank of America Securities Senior US economist Joseph Song told & nbsp; Yahoo Finance & # 39; s The Final Round .." We have a proprietary consumer confidence index and it actually dipped on the headlines of trading in last read. "" Data-reactid = "16"> "I think you're starting to see the pain," Bank of America Securities senior US economist Joseph Song told Yahoo Finance its latest round. "We have a proprietary consumer confidence index, and it actually dipped on the trade headlines in the last reading."
Bank of America Merrill Lynch US Consumer Confidence Indicator for Consumer Sentiment has fallen by 1.7 points to 53.9 since mid-July. In a note to clients, the bank's Global Research team writes that "the ebb and flow of consumer confidence seems square to the US-China trade war through negative headlines and reaction to the financial market in the aforementioned trade war."
Commerce War escalates
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Earlier this month, President Trump shocked the financial markets as he unveiled a new round of $ 300 billion in Chinese imports, which will primarily target consumer-related goods, set to take effect on September 1. He later announced that he & nbsp; would postpone tariffs on select popular consumer products by mid-December . "data-reactid =" 30 "> Earlier this month, President Trump shocked financial markets as he unveiled a new $ 300 billion Chinese customs round Imports, which will primarily target consumer-related goods, are set to take effect on September 1. He later announced that he would postpone tariffs on selected popular consumer products until mid-December.
<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "But in the recent escalation of US trade tensions and Beijing announced President Trump on Friday & nbsp; even higher tariffs for most Chinese imports & nbsp; in response to China slamming US goods tariffs to $ 75 billion earlier in the day. " = "31"> But in the latest escalation of US-Beijing trade tensions, President Trump on Friday announced even higher tariffs for most Chinese imports in response to China dropping US $ 75 billion in US tariffs earlier today.
In a tweet late Friday afternoon, President Trump said the White House will raise its September 1, $ 300 billion product tariffs to 15% from 10%. In addition, the United States will raise existing $ 250 billion in Chinese goods to 30% from 25% as of October 1.
… In addition, the remaining $ 300 billion of goods and products from China, which were taxed at 10% from September 1, will now be taxed at 15%. Thanks for your attention on this matter!
– Donald J. Trump (@realDonaldTrump) August 23, 2019
What does this mean for consumers?
"I think when these consumer tariffs go in from September 1, that's when you can actually start to see consumers retire," Bank of America Merrill Lynch's Joseph Song told The Final Round. “And our expectation is that growth will start to slow down at the turn of the year. ”
The BofAML Global Research team found that only 26% of consumers surveyed confirmed that they favored the trade war against China.
"The persistent uncertainty shock from the trade war is beginning to emerge in weaker global data and the recession indicators are starting to turn yellow," the BofAML team writes in a client note. Consequently, the feeling may fail to rebound, raising further concern for a financial downturn. "
<p class =" canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Iryna Kirby is the producer for Yahoo Finance. Follow her on Twitter at @IrynaNesko . [19659017] "data-reactid =" 38 "> Iryna Kirby is a Yahoo Finance producer. Follow her on Twitter at @IrynaNesko .
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