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What New Tariffs Mean For Shoppers

Aug 3, 2019
Originally published on August 3, 2019 12:49 pm
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SCOTT SIMON, HOST:

Once again, economists and retailers warn the prices you see in stores might go up in coming months because, once again, President Trump has threatened to impose new tariffs, this time, on $300 billion worth of goods, which would mean virtually all Chinese imports would have to pay a tax. NPR's Alina Selyukh is here. Thanks very much for being with us, Alina.

ALINA SELYUKH, BYLINE: Hello.

SIMON: We've been living with tariffs for more than a year. What might be different now?

SELYUKH: Well, now, we're going from tariffs that were largely on industrial goods and raw materials - like machine parts and steel - to actual things you'll find on store shelves. We've seen some impact in the stores already. For example, raw materials like steel and aluminum had impact on prices for appliances, like dishwashers and washing machines. Or tariffs on paper products increase the cost of toilet paper. But the administration had previously skirted around the vast majority of consumer goods until now. That is what's on the hook for a new 10 percent tariff that President Trump is threatening to impose in September.

SIMON: What kind of products would be affected?

SELYUKH: Just about everything. When you shop in the U.S., China is the source of almost half of the clothing, 70% of shoes, 88% of toys, of course, a lot of electronics. And all of that is now on the list. And it's not China that pays for the tariffs but American companies that import these products. For example, I spoke with Joe Shamie. He's the president of Delta Children, which is a huge maker of children's beds and products that are sold in most big-box and furniture stores. And Delta makes its products both in the U.S. and in Asia. Shamie says the impact of tariffs has already been severe, affecting about 70% of his products. For example, steel goes into springs of a crib; fabric goes on mattresses.

JOE SHAMIE: My specific company has been in a position where it either has to raise prices or sacrifice profits. And when it was a 10% duty, we were sacrificing part of that and taking a small hit in hopes that there was going to be a truce. But then the 25% duty came into play, and there was no truce. And we had to raise our prices.

SELYUKH: So he says the cost of cribs went up from 200 to about $250. A $100 car seat went up to $125, $135. And now he's looking at the new list of tariffs and realizing the rest of his products, including high chairs and strollers, might also face tariffs in September.

SIMON: Is there any way retailers can dodge increasing prices?

SELYUKH: Well, the big idea is to move manufacturing out of China. But to stick with the example of Shamie at Delta Children, his family has been working with its Chinese partners for 30-some years. And they're dealing with really sensitive products, where safety standards are paramount, right? You want to be able to use your crib or bassinet for several kids and not worry for their safety. And so the uncertainty is really stressful. He doesn't want to make big changes without knowing the long-term plan for these tariffs. And we don't know the long-term plan for these tariffs. This is the second time Trump has threatened this broad tariff and the first time he backed off. So experts say if the tariffs do go into effect, it's more of a question of whether the retailers can delay the price increases, not avoid them altogether.

SIMON: NPR's Alina Selyukh, thanks so much.

SELYUKH: Thank you.

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