The next round of tariffs on Chinese goods could knock American households for $1,000 per year, according to a new analysis from JP Morgan.
The U.S. is poised to add 10 percent tariffs on $300 billion in Chinese goods with some items subject to higher duties starting Sept. 1 amid the ongoing trade war. President Trump said last week that the tariffs for some items like cellphones, laptops, video games and clothes will be delayed until Dec. 15.
The upcoming tariffs will come with a larger direct impact for consumers, according to the analysis. That means consumers may be forced to reduce their spending on discretionary goods and services.
“Unlike the agriculture sector which is receiving subsidies/aid to offset the impact of China’s retaliatory actions, there is no simple way to compensate consumers,” the analysts wrote.
The impact could even offset most of the benefits households received from the Tax Cuts and Jobs Act Trump signed in 2017, which the analysts said came in at about $1,300 per year.
American households would feel an even bigger impact if tariffs on Chinese goods were raised to 25 percent, as the president has threatened and the U.S. already imposes on other items from China. The analysts said that could cost American households $1,300 per year.
But will it come to that? The analysts said they expect tariffs will be rolled back before the 2020 presidential election.
“We believe there is a good chance they end up reversing their decision and finding a way to reach some common ground with Chinese negotiators,” the analysts wrote.
It may just depend on how soon China will agree to “a better deal.” White House adviser Kellyanne Conway said on “Fox & Friends” Monday that Trump has taken a “long view” on negotiations.
“He wants a better deal,” she said. “He inherited a very imbalanced, non-reciprocal, unfair trade deficit with China.”