What China's new tariffs mean for you

Article Image

It's hard to keep up with the tit-for-tat trade war between the United States and China.While trade negotiations are ongoing, Chinese President Xi Jin...

Posted: Aug 25, 2019 12:00 PM

It's hard to keep up with the tit-for-tat trade war between the United States and China.

While trade negotiations are ongoing, Chinese President Xi Jinping and President Donald Trump have been imposing waves of new tariffs for more than a year now. No one is winning. Businesses, and therefore consumers, in both countries are feeling the pinch.

On Friday, Beijing threatened another round of duties on $75 billion of US-made goods. The move was in response to Trump's promise earlier this month to impose tariffs on $300 billion of Chinese goods -- though he relented and agreed to hold off on most of that until December to avoid hitting Christmas shoppers in the United States.

"My guess is these new Chinese tariffs are meant to send a signal more than anything else," said Phil Levy, who served as a senior economist for trade under President George W. Bush and is now the chief economist at freight forwarding company Flexport.

Here's the latest and what it means for American businesses and consumers.

Who will feel Beijing's new tariffs?

On Friday, Beijing said it would put tariffs back on American-made cars and trucks.

Those tariffs won't be a major blow to the US industry. They will penalize American companies only for the cars they make in the United States and export to China. Ford, for example, exports more cars to China than General Motors does.

But they will ding companies that send cars and trucks they make in the United States to China. In 2017, about 15% of America's auto exports, worth about $9.5 billion, were sold in China. The Association of Global Automakers, which represents international auto manufacturers that have factories in the United States, immediately issued a statement Friday claiming that Beijing's duties would result in a severe drop in exports.

"If those tariffs go back into effect and remain in effect, American jobs are at risk. There's no question about that," said John Bozzella, president and CEO of the automakers' group.

Chinese retaliation hurts American businesses

The tariffs imposed by Beijing make it more expensive for Chinese consumers to buy certain products made in America. The tariffs aim to hurt American businesses that export to China.

Beijing already has tariffs in place on about $110 billion of US exports, which included things like almonds, chemicals, toys, and machinery. If the new tariffs go into effect as planned, most US goods sold in China will likely face a duty.

Meanwhile, China is lowering tariffs on goods coming from other countries, making American-made items even more expensive comparatively, according to the Peterson Institute for International Economics.

Some of the new Chinese tariffs will be imposed on September 1 and the rest will go into effect on December 15 -- mirroring Trump's latest tariff threat.

Tariffs also hit farmers, who are already hurting

Some agricultural products are on the new list, but it would be difficult for China to inflict any more pain on American farmers than it already has. Sales of US-grown soybeans to China have essentially stopped since Beijing first put tariffs on them last year. As a result, farmers are getting a much lower price for their beans and ended up putting a record amount in storage at the end of last year's harvest.

China also has tariffs on beef, wheat, corn, apples, cherries and peanuts.

Targeting Trump's base

Beijing knows that farmers and manufacturers are politically important for Trump. China, along with the European Union, has put tariffs on whiskey -- made in red states like Tennessee and Kentucky, the home of Republican Senate Majority Leader Mitch McConnell. Europe's tariffs were put in place in retaliation to Trump's duties on foreign-made steel and aluminum.

Things could still get worse for American consumers

Trump's tariffs on Chinese-made goods make them more expensive for American shoppers. If he moves forward with his next round, the tariffs will start to affect consumer goods like iPhones, laptops, sneakers and clothing. A significant portion of those items sold in the United States are made in China.

As of Friday, the administration planned to hit some of those goods with a tariff on September 1 and the remaining items on December 15 -- in order to avoid making some holiday presents more expensive.

Once in effect those new tariffs could cost the average American family $1,000 a year, according to an estimate by JPMorgan Chase.

Other consumer goods, including luggage, baseball caps and bicycle parts, have already been hit with tariffs. American shoppers may have not have noticed it as much, however, because earlier rounds mostly hit industrial materials and components that are used by manufacturers.

Correction: An earlier version of this article incorrectly characterized Ford's exports to China.

Indiana Coronavirus Cases

(Widget updates once daily at 8 p.m. ET)

Confirmed Cases: 34211

Reported Deaths: 2125
CountyConfirmedDeaths
Marion9761576
Lake3573186
Allen160069
Cass15877
St. Joseph126634
Elkhart126228
Hendricks116671
Hamilton115493
Johnson1097108
Madison58659
Porter53428
Bartholomew50834
Clark49741
LaPorte43023
Howard40428
Tippecanoe3933
Delaware38536
Jackson3821
Shelby37122
Hancock33127
Floyd31839
Boone31635
Morgan27824
Vanderburgh2662
Montgomery23817
White2338
Noble22821
Clinton2271
Decatur22431
Grant21022
Dubois1993
Harrison19422
Henry17211
Greene16924
Vigo1688
Dearborn16821
Monroe16712
Warrick16628
Lawrence15924
Miami1401
Putnam1367
Jennings1304
Kosciusko1271
Orange12622
Scott1193
Franklin1108
Ripley1086
Marshall1021
Carroll932
Daviess8516
Steuben832
Wayne785
Fayette777
Newton7710
Wabash772
LaGrange762
Jasper661
Washington521
Clay511
Jay500
Fulton491
Randolph473
Rush462
Pulaski460
Jefferson451
Whitley413
Starke393
DeKalb371
Sullivan351
Owen341
Brown331
Perry320
Wells310
Benton300
Knox280
Huntington272
Tipton251
Blackford252
Crawford240
Fountain212
Switzerland200
Spencer201
Parke170
Adams171
Posey160
Gibson152
Ohio130
Warren121
Martin110
Vermillion100
Union90
Pike60
Unassigned0167

Illinois Coronavirus Cases

(Widget updates once daily at 7 p.m. CT)

Confirmed Cases: 118917

Reported Deaths: 5330
CountyConfirmedDeaths
Cook771193603
Lake8238288
DuPage7620368
Kane6259176
Will5510273
Winnebago220955
McHenry153972
St. Clair112180
Kankakee90045
Kendall77819
Rock Island65124
Champaign6277
Madison57259
Boone44117
DeKalb3994
Sangamon34829
Jackson28210
Randolph2694
Peoria2218
McLean21813
Ogle2033
Stephenson2012
Macon19419
Clinton18617
Union15510
LaSalle15013
Whiteside13912
Iroquois1314
Coles12615
Out of IL1181
Warren1150
Jefferson10116
Grundy982
Knox980
Monroe9511
McDonough8711
Lee811
Unassigned800
Cass730
Tazewell725
Henry690
Williamson661
Pulaski560
Marion500
Jasper457
Macoupin452
Adams441
Perry420
Montgomery391
Vermilion391
Morgan361
Christian354
Livingston342
Jo Daviess320
Douglas270
Fayette203
Ford201
Jersey201
Menard200
Woodford192
Mason180
Washington180
Hancock170
Mercer170
Carroll162
Shelby161
Bureau151
Schuyler130
Bond121
Franklin120
Clark110
Crawford110
Fulton110
Moultrie110
Piatt110
Brown100
Cumberland100
Logan100
Wayne91
Alexander80
Henderson80
Johnson80
Effingham71
Massac70
Saline70
Greene50
Marshall50
De Witt40
Lawrence40
Richland30
Stark30
Clay20
Edwards20
Gallatin20
Hamilton20
Wabash20
White20
Calhoun10
Edgar10
Hardin10
Pike10
Pope10
Putnam10
Terre Haute
Clear
57° wxIcon
Hi: 74° Lo: 49°
Feels Like: 57°
Robinson
Clear
57° wxIcon
Hi: 74° Lo: 53°
Feels Like: 57°
Indianapolis
Broken Clouds
60° wxIcon
Hi: 72° Lo: 47°
Feels Like: 60°
Rockville
Overcast
53° wxIcon
Hi: 72° Lo: 49°
Feels Like: 53°
Casey
Clear
59° wxIcon
Hi: 73° Lo: 54°
Feels Like: 59°
Brazil
Clear
57° wxIcon
Hi: 72° Lo: 49°
Feels Like: 57°
Marshall
Clear
57° wxIcon
Hi: 74° Lo: 53°
Feels Like: 57°
A calm evening is expected
WTHI Planner
WTHI Temps
WTHI Radar

WTHI Events