Need a new computer, television or phone? You might want to consider getting one now.
That’s because President Donald Trump enacted a new 10% across-the-board tariff on Chinese goods Tuesday morning.
Economists warn that tariffs hurt American businesses and consumers, many of whom are still reeling from the sharp rise in inflation in recent years. Tariffs are paid by US importers, not the countries at which the tariffs are aimed, as Trump has claimed. Those costs are often passed on to retailers and eventually American consumers.
Unlike Mexico and Canada, which largely avoid tariffs on exports to the United States because of the current USMCA trade agreement that Trump signed in his first term, a wide array of Chinese goods already faced tariffs before Tuesday. (Trump also ordered 25% tariffs on Mexican and Canadian goods but delayed them until March 1).
In addition to the new 10% tariff, Chinese goods are subject to additional tariffs: a 100% tariff on electric vehicles and 25% tariff on steel and aluminum products. But several items had been exempt from tariffs.
One of the biggest exemptions had been consumer electronics. But that exemption is no longer in place with the new across-the-board tariffs. That matters because consumer electronics are among the top goods the US imported from China last year, according to federal trade data.
Communications equipment accounted for 12%, or $47 billion, of the $401 billion worth of goods the US imported from China last year, not accounting for December, making it the single top category of goods the US imported from there. (December trade data is set to be released Wednesday.)
Communications equipment includes everything from cellphones to TVs to satellites, according to the classification system the US government uses.
Valued at $39 billion, the second-biggest category of goods the US imported from China last year was computer equipment. That includes tablets, laptops, monitors and essentially all the components that power them, such as semiconductor chips and and network interface cards.
Then comes the $37 billion category of goods deemed “miscellaneous manufactured commodities” the US imported from China last year. Toys, jewelry, silverware, and sporting equipment are all among the goods included in that umberella category.
Like many consumer electronics, they’ve virtually escaped many tariffs in place on Chinese goods imported to the US.
Also expect shoe and sneaker prices to rise. The footwear industry is particularly exposed to tariffs because roughly 99% of all shoes and sneakers sold in the United States are imported, mostly from China and Vietnam, according to the Footwear Distributors and Retailers of America.
“If you want to make a list of ways to drive up prices, this would be at the top of the list. It’s totally counterproductive,” Matt Priest, president and CEO of the FDRA told CNN in a phone interview on Monday. “We pay the tariffs. The American consumers pay the tariffs. These are not external revenue sources. They are internal.”
The trade group represents Nike, DSW, Under Armour and dozens of other brands.
So when will consumers feel the sting from the 10% tariff?
Prices probably won’t rise immediately on stuff coming into the United States from China — goods have been warehoused without the additional 10% tariff for quite some time. But as inventories clear out and new Chinese items come ashore, American consumers will start to bear the burden.
A complicating factor: Some retailers may be able to absorb the higher costs of tariffs, especially if they’ve stockpiled additional inventory in advance.
But others may not be able to afford to do so, in which case consumers could expect to see price increases in the near future.
CNN’s Matt Egan contributed to this report.
