Trump’s New Tariffs Are Going To Hurt

President Trump's newest tariffs went into effect over the weekend. They're going to hurt.

The start of a new month means a new round of dumb, ill-advised tariffs on Chinese goods from the Trump Administration and they’re going to have a serious impact on the average American family:

It just became 15% more expensive for U.S. companies to import everything from milk to diapers and sports equipment from China.

Tariffs on $112 billion of Chinese goods went into effect Sunday. While some duties have been delayed and some items have been removed from the original list of $300 billion Chinese imports, many everyday grocery items and household staples will still be targeted beginning Sunday, according to an official list that spans 122 pages.

Chinese retaliatory tariffs ranging from 5% to 10% on a portion of $75 billion U.S. goods also are scheduled to go into effect Sunday.

The newest round of tariffs on Chinese goods are consumer-focused and will cost the average American household $1,000 a year, J.P. Morgan estimated.More than 160 industry groups have condemnednew tariffs on China and the escalation of the trade war. Furthermore, over 30% of US companies are blaming tariffs for disappointing second quarter profits, according a Wells Fargo analysis.

Yet, President Donald Trump claimed “badly run and weak companies” are blaming his tariffs on China for difficulties they face

Meanwhile, Ana Swanson at The New York Times notes that the U.S. and China seem to be moving further apart with no clear end in sight:

President Trump’s trade war with China entered new territory on Sunday as his next round of tariffs took effect, changing the rules of trade in ways that have no recent historic precedent and driving the world’s two largest economies further apart.

American tariffs on foreign goods had already climbed higher than any time since the 1960s before Sunday, when the United States imposed a new 15 percent tariff. The levies on food, clothing, lawn mowers and thousands of other “Made in China” products come as the president prepares to tax nearly everything China ships to America. The move will bring average tariffs on Chinese imports to 21.2 percent, up from only 3.1 percent when Mr. Trump came into office, according to data from the Peterson Institute for International Economics.

China has responded by raising barriers to American companies and their products, while easing them for other nations. Trade between the world’s two largest economies has slumped, and China, which had long been America’s biggest trading partner, dropped to third place in the first half of the year, behind Mexico and Canada.

American companies that once believed the trade war would blow over are now scrambling to limit their exposure to China, in some cases shifting production to other countries, like Vietnam, to avoid tariffs that will soon reach as much as 30 percent.

None of this should come as a surprise, of course. Contrary to everything that the President has said, tariffs on imports ultimately end up getting paid for by end-users and consumers. In this case, the fact that the end-user is the American consumer means that higher prices for a whole host of consumer goods just on the eve of the most important period for American retailers of the entire are inevitable. This will likely translate into lower consumer spending in response to the higher prices, and greater pain for a retail industry already facing pressure from competition with online shopping. This could lead to problems for already struggling retailers such as J.C. Penny and Sears, both of whom have been close to the edge of extinction for years now. Other retailers, such as WalMart and Target, will likely be able to withstand the bad winds due to the fact that they’ve both developed relatively robust online shopping divisions.

These new tariffs, if they are imposed, are likely to have an even bigger impact on consumers than previous rounds of tariffs have. In part, this is because previous tariffs have largely tried to avoid increasing the prices of consumer goods in ways that would make it noticeable. To a large degree, though, we’ve run out of ways to avoid placing tariffs on consumer goods and so here we are. This is why retailers are warning the Administration that these latest round of tariffs would result in higher consumer prices and layoffs in the retail industry. Additionally, the fact that these tariffs, which could rise to as high as 25% according to reports, would go into effect as the economy is shifting toward the holiday shopping season could mean that the impact on the economy is even more widespread than forecast.

The President is fond of saying that  “trade wars are good and easy to win,” As we’ve seen, the fact is that they are bad and everyone loses.

FILED UNDER: Economics and Business, International Trade, US Politics, , , , , , , , , ,
Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed far too young in July 2021.


  1. Kathy says:

    Dennison’s gone from declaring war to claiming the German, I’m sorry, American companies are unworthy of him in record time.

    I wonder if he owns a bunker among his many properties.

  2. Teve says:

    Last week I heard someone say “there are actually a huge number of farmers who are pissed at the Trump administration, but Fox won’t talk about it and so the Trump administration doesn’t know about it.” I wonder if that is true.

  3. Slugger says:

    Can someone explain trade to me? Look at the two following scenarios:
    A. I have $100, and someone in Scotland has a bottle of the 18 year old Oban
    B. I have the Oban, and the Scot has the $100
    I don’t think that I’m worse off under B. I do have a trade deficit, but Scotland has a whiskey deficit.
    Multiply these events a million times, and I still don’t see the problem.

  4. JKB says:

    I predict by the end of the month after the Chinese slaughter the Hong Kong protesters Tiananmen Square-style, you’ll be back here calling for embargoes and tariffs against the Chinese. This way, American companies will be ahead of the game in adapting to the changes. The social media kiddies and the kid journalists know nothing of 1989 so the action will shock their conscience and they’ll demand action.

  5. Joe says:

    And even if you sad and cynical prediction came true, we would be spent out of the most straightforward ways to address it. Thanks, Donald.

  6. Kathy says:


    According to Trump, you’re an idiot who just gives money away unfairly to Scotland for some unfathomable reason.

    You should, according to Trump, impose a 25% tariff on Sottish whiskey, so you’ll switch to American-made Scotch, and charge the Scots $25 for every bottle you dont’ buy from them.

    Or something.

  7. Slugger says:

    @JKB: Let this liberal repeat what he said before. I support the idea of P.J. O’Rouke, a conservative, who suggested at the time of the handover of HK to the PRC that we airdrop five million green cards on HK. This would be a meaningful response. It would expiate 1882 as well.

  8. Jen says:

    @JKB: The Chinese won’t go that route with Hong Kong, I don’t think.

    They don’t need to. They’ve got a new tool in their arsenal in social media, and they are deploying it and other measures (pressure on airlines, ink that stains protesters’ clothing) with a fair amount of precision. My guess is that they will chip around the edges and wait this out. They already made gains when the protesters were disrupting air travel.

    That said, @Joe: is correct–if the Chinese did do something horrific along the lines of Tienanmen Square, we’ve already deployed our best and only real response.

  9. liberal capitalist says:

    Call it what it is:


    So much winning.

  10. Jen says:

    @Kathy: As a single-malt gal, I’ll note that there is no such thing as American-made scotch. By law, Scotch is whisky (no e!) made in Scotland. Anything outside of Scotland is called whiskey and either single-malt (barley) or bourbon (corn). Detail.

    I’ve been wondering if I should stock up pre-Brexit, frankly…

  11. Kathy says:


    I don’t drink any of those, so I’m happy to take your word for it.

  12. inhumans99 says:

    Where is that cowardly weasel “no new taxes on the American Public” Grover Norquist? What a coward, afraid to shame his Republican masters because it is the GOP imposing a new tax on consumers not the Democratic Party.

    If someone can point me to a credible source showing that he is pushing back hard (with teeth, if you will) on the tariffs, great…happy to eat crow even if the link comes from JKB, otherwise, where the hell are the Republicans screaming bloody murder that the government has imposed a new tax on the American Public?

    JKB has already shown it to be a lie that the GOP is the party of no new taxes on the American Public as he/she seems happy to pay more for a large variety of goods going forward in time.

  13. Teve says:

    @inhumans99: Kevin drum asked this question in May specifically with regard to norquist.

    Drum concluded that norquist was not really too upset because the data shows that Trump’s tax cut gave the rich a huge bonus, and that tariffs disproportionately affect poor and middle class people.

  14. An Interested Party says:

    Where is that cowardly weasel “no new taxes on the American Public” Grover Norquist? What a coward, afraid to shame his Republican masters because it is the GOP imposing a new tax on consumers not the Democratic Party.

    Who knows if the Democrats are smart enough or if the media would stop practicing both-siderism, but all of this idiocy being practiced by the GOP (huge deficits and tariffs, among other things) should be thrown back in their collective face when they try to accuse the next Democratic president of being fiscally irresponsible…

  15. Just nutha ignint cracker says:

    @JKB: All that may well be true, but you’re missing the most important feature of this whole thing. Somebody has to pay for Trump’s trade war and it certainly can’t be the top o.1% if they’re going to need to do another government-financed buy back of stocks to keep stock prices high so that the GOP leaders and conservative pundits can crow about how well the economy is doing.

    There’s only so many places that they can put their money and still keep it. It’s going to be up to the poor to carry this burden for us and, as I’m sure you and Guarneri will agree, it’s about time they had some “skin in the game” anyway.

  16. Just nutha ignint cracker says:

    @Teve: “… that tariffs disproportionately affect poor and middle class people who imagine themselves to be middle class but really aren’t by any realistic measures.


  17. rachel says:


    Dennison’s gone from declaring war to claiming the German, I’m sorry, American companies are unworthy of him in record time.

    I wonder if he owns a bunker among his many properties.

    Now I’m imagining him throwing a tantrum in a sand trap (AKA bunker, in golf).

  18. Ken_L says:

    The most peculiar feature of this ridiculous ‘trade war’ is that the war aims have never been articulated with any precision and no markers have been laid down to indicate when victory will have been achieved.

    In these respects it is remarkably like all the shooting’n’bombing wars America has started this century.