New $16B Trump Tariffs Mean Pretty Much Everything Could Cost More

A global tariff war is driving costs up but stocks are mixed.
  • President Donald Trump imposed 25% tariffs on $16B worth of Chinese products on Aug. 23.
  • These tariffs will affect 279 items, including motorcycles, thermometers, and transportation vehicles.
  • China responded in turn, also hitting U.S. imports with 25% tariffs on $16B worth of products, affecting items such as crude oil, cars and medical equipment.

Just like a vehicle is subject to a toll before entering a given highway, a tariff, in simplest terms, is a tax on a product coming into a country.

At their best, tariffs are used to raise domestic revenue or to protect industries or jobs. At their worst, tariffs can stifle domestic industries and make consumers reach further into their pockets when paying for the same goods. Everything from pens to cars can be affected. 

Click to see under what presidents the Dow performed the best and worst.

For businesses slapped with tariffs, there are a few choices to make up the losses: slash costs, maintain costs while the bottom line takes a hit, or pass the higher costs on to customers. China, the largest exporter in the world, has responded to the latest round of tariffs imposed by the U.S. government in turn: 25 percent tariffs on $16 billion worth of goods after the U.S. imposed the same on Chinese products. Stock effects have been mixed, but U.S., Chinese, and European markets stayed relatively flat after the latest tariff escalation, according to Investor’s Business Daily.

As President Donald Trump continues trade negotiations, the administration now faces retaliatory tariffs in a trade war it kicked off. U.S. industries, investors and consumers are starting to feel the effects — or at least brace for them. Here’s a breakdown of the types of tariffs and what’s at stake for the U.S. and your wallet.

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Steel and Aluminum Tariffs

  • Countries affected in addition to the U.S.: Canada, Mexico and the European Union
  • Cost impact: A 25 percent tariff on all imported steel and 10 percent on all imported aluminum

The Rust Belt was partly responsible for electing Trump in 2016. Voters living in areas from western New York throughout the Midwest were galvanized by his campaign promises to revive the economically fragile region, but almost two years later, Trump effectively killed the World Trade Organization, according to the Council on Foreign Relations, by imposing steel and aluminum tariffs, which greatly contributed to the economic strife of the struggling region.

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Everything from home appliances and food to airplanes, cars and construction materials depend on these important metals. Since the tariffs were introduced earlier this year, U.S. allies and trade partners have responded with tariffs on consumer products like food, cigarettes, denim and motorcycles.

On Aug. 10, Trump said he would double the tariffs on steel and aluminum imports from Turkey, where there is currently an economic crisis. The Trump administration is applying pressure to Turkey for imposing duties on $1.8 billion in U.S. goods in June, for the detention of American pastor Andrew Brunson, and because it objects to Turkey’s plan to acquire a Russian missile defense system, CNBC reported. U.S. lawmakers fear that the transaction could expose weaknesses in the American-made aircraft, and that Turkey could share those vulnerabilities with Russia.

What Trump tweeted about steel and aluminum tariffs:

Consumer Goods Tariffs

The price of Sharpies might go up and investing in the maker of Sharpies just got cheaper all because of forecasting tariffs and retaliatory tariffs, according to Crain’s New York. Newell Brands forecasted that just a 10 percent tariff on China-sourced goods — let alone a proposed 25 percent tariff being considered by the Trump administration — could cost the company $100 million. The forecast caused Newell Brands stock to drop 14 percent, decreasing its market value by $1.8 billion.

Newell Brands manufactures the following products, which could see a price increase or an increase in manufacturing and distribution costs because of tariffs:

  • Crock-Pots
  • Sharpie pens
  • Yankee Candles
  • Rubbermaid products
  • Goody products

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As a countermeasure to U.S. tariffs on Canadian products, the Department of Finance Canada released a long list of consumer goods originating in the U.S. that are subject to a 10 percent surtax, which started July 1, 2018, including but not limited to:

  • Yogurt
  • Coffee
  • Candy
  • Pizza
  • Strawberry jam
  • Orange juice
  • Ketchup, mayonnaise and other sauces
  • Candles
  • Toilet paper
  • Mattresses
  • Pens

What Trump tweeted about tariffs:

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Auto Industry Tariffs

  • Countries affected in addition to the U.S.: Canada, China, Finland, Germany, Hungary, Italy, Japan, Mexico, Slovakia, South Africa, South Korea, Spain, Sweden, Turkey, United Kingdom
  • Cost impact: 25 percent tariff on roughly $200 billion in foreign-made cars in 2018, as reported by The Washington Post; 25 percent tariffs on $16 billion worth of Chinese products that cover both fuel and vehicles.

Trump has proposed charging tariffs of 25 percent on imported cars, SUVs, vans, trucks and auto parts, which could send tariffs soaring to $445 billion, up from $85 billion.

For American drivers, this means that the same imported vehicles are going to cost a lot more. The price of a Honda Civic, or a similar entry-level car, could increase between $1,408 and $2,057; the price of a new compact SUV or crossover vehicle could jump by $2,093 to $3,066; and sticker shock could be felt by drivers shopping for upscale compact SUVs and crossovers as $4,708 to $6,972 could be added to the cost, according to the Peterson Institute for International Economics.

Related: New China-Imposed Tariffs Hit Tesla Hard

What Trump tweeted about tariffs:

Agriculture Tariffs

  • Countries affected in addition to the U.S.: Canada, China, Mexico and the European Union
  • Cost impact: A $14 billion emergency aid package to U.S. farmers

Farmers in the breadbasket of America have been so deeply affected by the tariffs that they’re expected to receive a $12 billion emergency aid package from the U.S. Department of Agriculture. In a release from the USDA, the bailout was described as a short-term strategy to give the Trump administration time to work on a longer-term solution.

American farmers feed the country but also depend on being able to sell overseas. Imposed tariffs, however, have driven up the cost of crops, including soybeans and sorghum, livestock products like milk and pork, and many fruits, nuts, and other specialty crops. Other countries have already taken note of this.

China, for example, has mostly halted the import of U.S.-grown soybeans and is now concentrating on growing its own soybeans, though it could be years before domestic product volume matches American imports.

What Trump tweeted about tariffs and farmers:

Technology Tariff

  • Country affected in addition to the U.S.: China
  • Cost impact: 25 percent tariffs on $50 billion worth of Chinese goods

From the smartphone in your pocket to the computer on your desk, most of the technology products keeping the world running are imported from China, but China also imports around $130 billion worth of American-made goods each year. Although materials like steel and aluminum are used to manufacture phones, cameras and computers, technology products can be subject to their own separate technology tariff.

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In May 2018, the White House announced tariffs on Chinese high-tech goods “containing industrially significant technology.” This decision was a response to “China’s unfair trade practices related to the forced transfer of American technology and intellectual property,” the Office of the United States Trade Representative said in a statement. The full impact of this tariff on various products is yet to be seen, and companies like Apple are paying close attention. According to Nasdaq, this could be disastrous for Apple unless the company gets some sort of exemption because China accounts for nearly 20 percent of its revenues.

What Trump tweeted about tariffs and trade wars:

Trump Trade Talks With European Commission Result in Tariff Hold

On July 25, 2018, President Trump and European Commission President Jean-Claude Juncker met to work on eliminating tariffs and other barriers on trade, according to CNN. They agreed to hold off on non-auto tariffs that threatened to devolve into a trade war for now.

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Trump tariff tweet:

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Stephanie Barbaran contributed to the reporting for this article.