The economy moves slowly. Sometimes, enormous changes can occur without the average person being able to spot the effects for months — or even years. So, while you might be getting sick of reading about just how big a change you’re in store for because of the trade war between the U.S. and China, the simple fact is that the American economy is beginning to reflect the added costs of tariffs on imports to the U.S. as well as the retaliatory tariffs on American goods being shipped elsewhere.
But, rest assured, there are definitely some Americans who are not looking around wondering what the big deal is. If you run a soybean farm or a furniture store, you’re already feeling the sting in a major way. And while changes to something like the price of a bushel of corn on commodity markets might not seem like something you should worry about, the simple fact is that it probably is — you just don’t know it yet.
So, here’s a look at some changes in prices for various everyday goods and commodities caused by the trade war.
- Price Increase: $200 in the retail price of a table
Operating a retail furniture store is going to include sourcing a wide variety of items from suppliers around the globe, who themselves are juggling the cost of importing and using supplies. That leaves many furniture store owners sifting through thousands of items they offer to determine their source — and increasing prices to reflect their new costs.
- Price Increase: $86 per unit
President Donald Trump’s administration slapped a tariff on imported washing machines last year — starting at 20% and then rising to 50% after total imports cleared a previously established quota — after complaints from Whirlpool. However, in a great example of the law of unintended consequences, that has driven up the price on all washers. While it should, hypothetically, only impact the price of imported washers, domestic makers have taken advantage of price increases for the competition to raise their own prices and reap bigger profits.
All this has translated to consumers taking a hit to the tune of about $86 a unit.
- Price Increase: $92 per unit
There’s no tariff on dryers. However, since your dryer is a “complementary good,” sellers are getting away with increasing prices along with washers rather than letting the prices diverge.
- Price Increase: $0.04 per pound
Outside of Hawaii, there’s not a lot of coffee grown in the U.S. However, Kona coffee is internationally recognized for its quality, and the retaliatory tariffs from some countries have targeted exported American coffee. That can have the effect of pushing down coffee prices, which is great for consumers, but it means coffee growers will take a real hit to their bottom line.
So, while the price of a pound of coffee is up almost a nickel since September of last year, it’s also down over 60 cents since where it was at the start of 2015.
- Price Increase: -$172.48 per metric ton
Good news, Dumbo! The price of peanuts has been falling sharply since peaking in September of last year, falling by nearly $175 per metric ton. However, while the European Union has slapped a tariff on the import of peanut butter, it’s not entirely clear how much that’s responsible for the declining value of peanut crops as the delicious, creamy spread lacks popularity across the pond.
- Price Increase: -$32.11
American farmers are among the country’s biggest exporters, sending roughly a fifth of their total crops to be sold overseas. As such, many of the retaliatory tariffs targeting the U.S. have focused there. So, when China slaps tariffs on American wheat, it lowers demand and ultimately causes prices to drop — hurting farmers trying to make ends meet.
That drop in price since last August translates to a loss of $177,512.10 in annual revenue for the typical wheat farm in Kansas.
- Price Increase: $0.17
You might not put a lot of thought into the price of rubber, but the people making most of the stuff you own are. Rubber is essential to a wide variety of goods — and the equipment that makes those goods — meaning changes in price there can ripple out across the broader economy.
While the most recent data is from before the May tariff hike, prices have been on the rise since reaching a bottom at 61 cents a pound in November 2018. But, with the United States importing some $21.4 billion a year in rubber and plastic goods from China, everything from tires to conveyor belts are likely to start costing more.
- Price Increase: $7,000 per vehicle
The supply chains behind your car are global, with nearly half the new cars sold in America getting made elsewhere and most of the other half still incorporating imported parts. However, the combined effect of all the new taxes on moving goods across borders is expected to translate to an increase in the cost of the average car by some $7,000, according to auto website Edmunds.
- Price Increase: $30
Chinese-made imports make up roughly half of the total market for bicycles in the United States, meaning bikes for all ages and riding styles are going to get more expensive.
- Price Increase: $25.70 per metric ton
If the recent updates to NAFTA ultimately go into effect, Canada and Mexico would be off the hook for the tariffs on aluminum and steel imposed by the Trump administration. In the meantime, though, iron ore has jumped in price by over $25 a metric ton since September of last year, overtaking a previous high of $88.95 from February 2017 on its way to a price of nearly $95.
The Price Changes for Apple Products
If you missed the controversies over the working conditions at Foxconn factories in China, you might not realize that your favorite Apple products are almost entirely manufactured in China. And, since they’re included in those goods with a new 25% tariff getting slapped onto them, it does mean that Apple products will likely increase in price.
Of course, one could observe that — with the company carrying a massive 22.12% profit margin and over $10 billion in net profit every three months — it would appear the company has ample room to absorb the additional costs itself, but that’s a question to be posed to Tim Cook et al.
iPhone XS Max
- Price Increase: $113
Fortunately, the 25% tariff applies to the wholesale prices, not the retail price. So while an iPhone XS Max normally sells for $1,249, it only has $453 worth of parts — translating to a little over $100 in extra costs.
- Price Increase: $160
While significantly cheaper than the “Max” model, the $999 iPhone XS is expected to see its price jump by $160 a phone.
- Price Increase: $30
While the potential increase in the price of phones is still hypothetical — the most recent round of tariffs only hit in May — some other products already took a hit with the last round. The updated Apple Pencil that came out in October, for instance, was $30 more than the one it was replacing.
- Price Increase: $300
Another product that was affected by the previous set of tariffs, the new Mac mini is $300 more than the previous version.
The Price Changes for Shoes
Some of your footwear is very likely made in China. And that’s almost regardless of your age or the style of shoe we’re talking about: In 2017, nearly 60% of all footwear imported into the United States came from China. As such, a blanket 25% tariff on imports means that shoes, boots and sandals large and small are likely to see prices climbing in the near future.
- Price Increase: $12.75
Including “landed costs” and other costs like the standard retail markup for the typical pair of sneakers, it will cost an additional $12.75 — on average — to buy a pair of sneakers in the United States.
- Price Increase: $30.34
If you’ve been saving up for a pair of incredible thigh-highs, be ready to save just a little longer. The typical boot stands to see its price jump by over $30.
- Price Increase: $4.40
Smaller shoes translate to a smaller price jump, in this case, but an additional $4.40 a pair for shoes you’ll need to replace several times over as your kid grows can really add up.
- Price Increase: $58.56
Hikers, beware: Your sturdy footwear for navigating deep woods and high mountains is among those hit by tariffs. The typical hiker should need nearly $60 more for each pair someday soon.
- Price Increase: $56.25
Anyone who thought it might be fun to sign up for a 10k to get into shape probably had a rude awakening once they came to realize just how much the shoes cost. Well, the sticker shock looks to get even more shocking: Prices are expected to climb by nearly $60 a pair.
- Price Increase: $48.74
You might already feel like an NBA contract is the only way to afford a nice pair of basketball sneakers, but things are about to get even worse. Your next pair could be about $50 more expensive.
- Price Increase: $15.58
Even hipsters aren’t immune to the effects of tariffs: Canvas shoes are expected to climb in price by over $15.
The Bill for the Trade War Is Paid by American Consumers
In many cases, the change to the price of an individual item will hardly be noticeable in the short term. However, taken all together, the changes add up. Even if you can measure the increase for each item in your grocery cart in the cents, consistently higher prices across the board will start to show up and lead many consumers to start buying less.
Here’s a look at the total costs of the tariffs as estimated by the Federal Reserve Bank of New York. This includes the total amount of taxes paid by importers, the “deadweight” loss — which refers to the lost efficiency due to needing to adjust supply chains — and the total cost to American consumers after all these effects have trickled down to them.
|Total Cost of Tariffs|
|Tax Payments||Deadweight Loss||Total Cost to Consumers|
|Monthly Cost||$3 billion||$1.4 billion||$4.4 billion|
|Annual Cost||$36 billion||$16.8 billion||$52.8 billion|
|Cost Per Household (Annual)||$282||$132||$414|
|May 2019 Tariffs|
|Tax Payments||Deadweight Loss||Total Cost to Consumers|
|Monthly Cost||$2.2 billion||$6.6 billion||$8.8 billion|
|Annual Cost||$26.9 billion||$79.1 billion||$106 billion|
|Cost Per Household (Annual)||$211||$620||$831|
So, the typical American family is approaching $1,000 a year in lost spending power on account of the trade war. And while a successful resolution might ultimately make up for that in the long term, the costs bourne today are causing real pain for some consumers.
Click through to look at the 12 states getting hit hardest by Trump’s tariffs.
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About the Author
Joel Anderson is a business and finance writer with over a decade of experience writing about the wide world of finance. Based in Los Angeles, he specializes in writing about the financial markets, stocks, macroeconomic concepts and focuses on helping make complex financial concepts digestible for the retail investor.