Economic experts warn that consumers, businesses, and the manufacturing sector in the United States could be the biggest losers in the escalating trade war with China.
Recently, the U.S. president temporarily shifted trade pressure away from other countries but continued to penalize China with harsh tariffs.
In response, China imposed its own tariffs, resulting in a tariff rate of 145% on Chinese products, with a temporary exemption for electronic devices.
Experts predict that this trade war will deliver a painful blow to American consumers and workers.
Tariffs and Rising Prices
New tariffs have caused rapid price hikes on retail products, according to Christopher Conlon, Associate Professor of Economics at New York University.
Conlon noted that products like clothing, toys, and plastic goods with basic electronics will experience immediate price surges. He advised consumers to consider purchasing durable goods, such as appliances, before prices climb higher.
Are the Gains Worth the Costs?
Analysts suggest that there is potential for shifting production from China to countries like Vietnam or Mexico. However, moving factories and supply networks demands substantial time and investment.
Sina Golara, Professor of Supply Chain Management at Georgia State University, highlighted that the cost gap in production makes relocating industry to the U.S. economically unfeasible despite higher tariffs.
Who Will Take the First Step Toward Resolution?
China blames the United States for escalating the conflict and demands the cancellation of unilateral tariffs.
Meanwhile, U.S. Treasury Secretary Scott Besant believes that Beijing must de-escalate tensions, stressing that the current reciprocal tariffs are unsustainable.
Ultimately, analysts agree that the best-case scenario would be a mutual agreement between the U.S. and China to reduce tariffs and stabilize economic relations.
