Shoppers beware. That warning has come from economists ever since the trade war with China began last year. Eventually, they said, the battle between the two economic superpowers will hit ordinary Americans with higher prices at the cash register. Tariffs will bite.
Already some things cost more. But the impact of customs duties is uneven.
In August 2018, NPR began tracking how these tariffs can trickle down to buyers at the world's largest retail chain – Walmart. Since that time, for a few months now, we have checked prices on about 80 products at a Walmart in Liberty County, Ga., For rates.
After one year, some prices in NPR's basket have risen significantly, at least in part due to customs duties. The price of dog leashes has risen 35%. A screwdriver costs 7% more.
But the prices are complicated. They do not automatically increase with tariffs.
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In fact, shoppers are just beginning to feel tariffs. Last year, the Trump administration focused specifically on industrial materials and parts rather than consumer products, to avoid shocking Americans with price rises. The new rounds kicked in this month and December will more directly affect much more of the things people buy every day, such as shoes, clothing and electronics.
For the White House, the goal of the tariff is to make Chinese imports more expensive so that US companies move production and work back to the United States. But few companies have actually managed to do so; many are set or switched to other foreign countries such as Vietnam.
So far, many manufacturers and sellers have chosen to absorb most of the tariffs, spread them over dozens of items, or pressure suppliers to carry more of the burden. The major US retailers ̵
When it comes to prices within NPR's customs-inspired shopping basket, the average price change since August 2018 was a 3% increase. This is almost twice the current inflation rate.
It is important to note that some prices actually fell. The two most expensive Chinese-made items in NPR's basket were cheaper: a TV with 12% and a microwave oven with 17%. That's because TVs and other electronics have become cheaper for years.
Tariffs are only part of the story. Prices go up and down for many different reasons. For example, last year Procter & Gamble raised the prices of Charmin toilet paper and Bounty paper towels – noticeable in NPR's shopping basket – due to higher costs for transportation and raw materials, such as pulp.
Impact of the Trade War
To make NPR's basket, we consulted the 2018 tariff lists The White House introduced imports from China, but also Mexico and Canada – as well as China's retaliatory tariffs for the US – manufactured products. Your cart contains items from across the store, including groceries, home goods, and stationery.
No companies wanted to discuss specific products. But Jennifer Dolin, head of government affairs at Ledvance – manufacturer of Sylvania light bulbs in NPR's shopping basket – said tariffs are "one of several factors" that have contributed to price fluctuations on light products.
"A majority of light components and finished products sourced from China have been affected by the recent rates imposed by the US government," Dolin said in a statement. "These tariffs affect almost all lighting companies operating in the United States, including Ledvance."
Toolmaker Stanley Black & Decker – whose screwdriver is in NPR's basket – warned last October that they would begin raising prices this year to offset $ 200 million. in new production costs caused by tariffs. A spokeswoman told NPR: "Although we produce a lot in the US, we have a global supply chain that we rely on with production around the globe."
NPR also tracks the price of a colorful girl bike with exercise wheels, made by Kent International. CEO Arnold Kamler refused to speak to Walmart prices, but said his company "found it necessary to raise prices by at least 15%" due to higher tariffs.
Not easy to change production
Two of the price increases we saw in NPR's basket were in pet products: a dog leash and a dog collar. The industry has been hit by tariffs that affect fabric, metal and plastic – and many of the pet supplies are predominantly produced in China, said Mike Bober, head of the Joint Pet Industry Advisory Council.
Like most other manufacturers – in footwear, automotive and other industries – pet products manufacturers have sought to absorb new costs, especially as the US dollar has been strong against the Chinese yuan. But they can't do it forever, Bober said.
Plus, just like companies that make furniture or baby goods, animal care product manufacturers are leery of leaving their business with China – as President Trump has "ordered" companies to do – because of the long-standing safety and quality standards they have developed at factories there.
"Really throughout the life cycle of pet care products, everyone feels this pinch, and ultimately the people who will suffer the most are pet owners," Bober said. "Prices must continue to go up."
Food and personal care prices
Food prices – another category with some major price jumps in NPR's basket – are some of the most difficult to analyze. They fluctuate a lot and are influenced by many factors besides tariff rates.
For example, higher prices for cod and cabbage had more to do with bad weather and low catch levels than the trade war, Food Institute President Brian Todd said.
At the other end of the spectrum, China's retaliatory duty on US products helped reduce the prices of pork and some of the seafood. China restricting US imports left North American companies a glut for domestic sales. "We lost an export market, so there's more here," Todd said.
At the same time, higher prices for garlic – they rose 53% – actually illustrate tariff rates that seemed to work as intended.
China had been the largest exporter of garlic to the United States, and domestic garlic growers have long claimed to be undermined by cheaper Chinese competition. Now that Chinese garlic is facing higher tariffs, domestic companies may demand higher prices.
Walmart did not comment on the story, but in May the company warned that "increased tariffs will lead to increased prices for our customers." Last month, Walmart chief financial officer Brett Biggs said the company has been able to "thoughtfully manage prices and margins."
"We spread the impact over the hundreds of thousands of items we have on the market," Walmart United States CEO Greg Foran told reporters at the time.
Editor's note: Walmart is among NPR's financial backers.
Ayesha Abid contributed to this report.