SMM News: Trump will pass on the pain of tariffs to the global economy, and American consumers are undoubtedly losers of trade tensions, according to an article on Bloomberg's website.
At the beginning of the article, US President Trump claimed that China was paying for his tariff war. But Mike Yuan, a furniture salesman in Zhejiang, a commercial heartland on China's east coast, does not think so.
"We don't have to pay the tariffs at all," Yuan said. " About half of his products are sold to the United States, including Walmart and marketers.
The article said his confidence was based on the innovative design of the company's office chairs and other products that cannot be easily replaced by American buyers. Yuan said sales in the United States were unaffected and Wal-Mart raised the price of its products by nearly 10%.
Starting on may 10th, Mr Trump raised tariffs on $200 billion worth of Chinese goods from 10 per cent to 25 per cent, affecting the entire supply chain. Evidence from Chinese companies suggests that this will have an impact on low-end products, while many of the higher end of the value chain are largely unscathed.
The article points out that it now seems more certain that the global economy will feel rising costs. In some cases, product prices will rise for US consumers; in others, they will hurt the profits of Chinese and US companies, and if the global economy slows, it will drag down growth in affected countries.
"American consumers will pay the price," said Dong Tao, an economist at Credit Suisse in Hong Kong. Most other countries have a surplus with China, so if the Chinese economy slows down, many other countries will slow down as well. "
Another $300 billion worth of Chinese goods, including children's clothing, toys, mobile phones and laptops, have been threatened with a 25 per cent tariff, the article said.
According to the article, the hair dryers and hair curlers produced by Zhejiang Taizhou Jinba Health Technology Company have a $300 billion list of goods, but the employees there are still not worried. An employee surnamed Tao, who declined to give his full name and position, said in an interview that U. S. companies or consumers will have to pay higher tariffs because they cannot buy products from elsewhere.
"Southeast Asian countries do not have supply chains and they cannot even produce parts," Tao said. " Half of his company's products go to the United States. "as for hair dryers, where can they buy these products? If you buy a European one, it will be more expensive. If this happens, US importers will have to pay for the additional tariffs, which will certainly lead to higher retail prices. "
"there is no doubt that American consumers are losers of trade tensions," Gita Gopinat, chief economist of the International Monetary Fund, concluded in a blog post co-authored with others in May. " "tariffs are completely transferred to the domestic prices of imports," according to a report by Mary Amiti of the Federal Reserve Bank of New York. "