Trump threatens the trip to 25% and damages consumers


Shares fall sharply after President Trump threatened several charges against China. The increase in tensions came as investors hoped that the long-term trade war between the world's two largest economic forces could be winding. (May 6)


The trump administration's 10% US $ 200 billion tariff in Chinese imports has not been a nuisance, and many US companies are absorbing the costs or working around.

But President Trump's weekend weekend duty to 25% duty would dramatically confuse the damage as the share of the lease share is transferred to consumers, and it charges both the economy and the company's profits.

"A sudden wage increase of less than a week's notice would disturb seriously US companies, especially small companies that have limited resources to reduce the impact," said David French, senior vice president of government for the National Retail Federation. meeting higher prices and US jobs will be lost. "

The tariff will affect nearly 6,000 products and parts, including many consumables such as furniture, clothing, electronics, handbags, luggage, hardware, shampoos, perfumes, plates, bedding, bicycles, meat New cereal prices can also increase as parts from China become more expensive, says Bank of America Merrill Lynch, auto analyst John Murphy, in a survey note Monday.

AudioControl, which makes high-end audio equipment, imports about 25% of his parts from China, says Alex Camara, CEO of Seattle-based company, out of the 10% tariff he says: "We has primarily absorbed the cost, which has been painful. "

" Impossible to absorb & # 39;

But if the tariff climbs to 25%, "it's impossible to absorb," he says. "10% have damaged our margins, but 25% is a serious impact." And with the higher tariff that comes into effect on Friday, he says, "You can't even plan for it."

Camara estimates that he had to increase the total prices of dealers and dealers by 8% to 12%, costs that would be transferred to consumers and which could shrink sales. He says he must also reduce his investment in new technology.

President Trump and Chinese President Xi Jinping are expected to resume negotiations to resolve the country's trade war.

[Foto: NICOLAS ASFOURI, AFP / Getty Images]

All told that the 25% tariff of $ 200 billion in Chinese imports, along with existing $ 50 billion duties in Chinese shipments and on steel and aluminum, would reduce US employment by 934,000 and cost the average family of $ 767 a year, according to a trade partnership study. Trump's threatened 25% tariff will constitute a significant part of that tariff.

More: Dow, shares close a bit after a previous shot from Trump's trade threat to China [19659005] Trump's total $ 250 billion shipping charges from China have, in another way, barely been blip for the economy, trimming growth with an estimated tenth percentage point for the whole of 2019, according to Oxford Economics. However, raising the $ 200 billion tariff into imports to 25%, tripling the impact to three-tenths of a percentage point, taking a significant chunk of US growth as many economists forecast at about 2.2% this year.

Trump has also threatened to throw a 25% tariff on the remaining $ 325 billion in imported goods from China "short". Such a move, along with the other duties, would cost the US 2.1 million jobs and the average family of four over $ 2000 per year, the Trade Partnership Study says.

The outlook is not all gloomy. Some industries are expected to add jobs as the tariffs cause some companies to buy goods from the US, including steel, textile, apparel and electronics manufacturers.

So far, dealers, especially large, dealt tariffs through various strategies, French says. They have convinced Chinese suppliers to trim costs, import a large stock of goods before the duties came into force, spread distributed fees over many products to minimize the impact, and absorb some of the expenses, French said.

More: Game of Thrones & Starbucks Cup errors are not new. Hi, accidental product placement.

"Most dealers found a way around it," he says, adding that smaller buyers are less able to negotiate and many likely have to eat costs or transfer them to buyers.

But with the 25% tariff threatening, "You just take the full bride off it," he says.

Some consumer electronics manufacturers have already begun to shift production from China to other Southeast Asian countries, a tactic that will intensify under a 25% duty, says Sage Chandler, Vice President of International Trade for Consumer Technology Association.

Bluesalve Partners of Boonton, New Jersey, makes Bluetooth speakers and other products through contractors in China. When the 10% tariff came into force, the company's principal Robert Heiblim renegotiated prices with his Chinese suppliers and imported extra products before the 25% duty was imposed to enter into force early this year. If the 25% fee is passed, he says he has sufficient inventory to last a couple of months, but then it will probably pass about half of the 25% tariff to his dealers. In turn, they will increase retail prices.

Hire fewer workers or layoffs

"There is no way around it," he says. Heiblim, who plans to add up to 20 employees to his 25-year-old staff, says he would instead reduce his recruitment plans to just three to five people, limit raising and cutting the advertising budget.

Kent International, a bicycle maker based in Parsippany, New Jersey, raised prices 10% last year due to the charges. Sales fell, but then recovered as consumers have adjusted, says CEO Arnold Kamler.

But, "Bikes are highly price-sensitive, and another 15% price increase will be detrimental to us both in sales and in lost profits," Kamler says.

Tiffany Williams, owner of Luggage Shop in Lubbock, Texas, has no choice but to transfer the 10% tariff to shoppers. She estimates that the higher prices have reduced sales by 5% to 10%, mostly affecting higher baggage, which previously cost $ 400 to $ 479. "Now, it will be more of a luxury bag," she says.

As a result, Williams did not add a part-time worker during the holidays and another early in the year. If she hits another 15% tax, "It's going to be very difficult," she says. She can no longer be profitable, and probably it must be considered to be dismissed, but only as a last resort, she says.

"This is just crazy," Williams says.

Contributing with Yan Zhang and Nathan Bomey [19659033] CLOSE

In an AP interview, Democratic Senator Doug Jones of Alabama tells that Associated Press President Donald Trump's tariff speech speaks farmers, automakers and others in the deep red state. (December 12)

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