American consumers could lose between $46 billion and $78 billion in spending power each year if new tariffs on imports to the United States are implemented, according to a new study released today by the National Retail Federation.
NRF’s study, ‘Estimated Impacts of Proposed Tariffs on Imports: Apparel, Toys, Furniture, Household Appliances, Footwear and Travel Goods’, examines how former President Donald Trump’s tariff proposals would impact these six consumer product categories. Trump proposed a universal 10-20% tariff on imports from all foreign countries and an additional 60-100% tariff on imports specifically from China.
“Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices,” said Jonathan Gold, NRF Vice President of Supply Chain and Customs Policy.
“A tariff is a tax paid by the US importer, not a foreign country or the exporter. This tax ultimately comes out of consumers’ pockets through higher prices.”
While some US manufacturers may benefit from the tariffs, the gains to US producers and the Treasury from tariff revenue do not outweigh overall losses to consumers, according to the study.
For example, a $40 toaster oven would cost consumers $48-$52 after the tariffs. The price of a $50 pair of athletic shoes would jump to $59-$64 and a $2 000 mattress and box spring set would end up costing $2 128-$2 190. Within each category, higher prices and loss of spending power would hit low-income families especially hard.
Key findings from the study show that the proposed tariffs on the six product categories alone would reduce American consumers’ spending power by $46 billion to $78 billion every year the tariffs are in place.
The tariffs would have a “significant and detrimental impact” on the costs of a wide range of consumer products sold in the United States, particularly on products where China is the major supplier.
The increased costs as a result of the proposed tariffs would be too large for US retailers to absorb and would result in prices higher than many consumers would be willing or able to pay.
Consumers would pay $13.9 billion to $24 billion more for apparel; $8.8 billion to $14.2 billion more for toys; $8.5 billion to $13.1 billion more for furniture; $6.4 billion to $10.9 billion more for household appliances; $6.4 billion to $10.7 billion more for footwear, and $2.2 billion to $3.9 billion more for travel goods.
Based on current trade, average tariff rates for all categories examined would exceed 50% in the extreme tariff scenario, up in most cases from single or low double digits.
View the ‘Estimated Impacts of Proposed Tariffs on Imports: Apparel, Toys, Furniture, Household Appliances, Footwear and Travel Goods’ study here.
The study was commissioned by NRF and prepared by Trade Partnership Worldwide LLC.
