The cost of President Donald Trump’s latest tariffs on Chinese goods will either be passed on to consumers, or taken from profits, several US companies said Wednesday.
“The American people are being misled by this administration that China is paying for these tariffs. This is a tax on them, or on the businesses that are bringing products to America,“ said Win Cramer, chief executive of Jlab Audio, a California company that makes headphones.
Cramer, who has suspended plans to hire more staff in light of the tariff threat, joined a conference call organized by “Tariffs Hurt the Heartland,“ a campaign of trade organizations to a policy of a president who has referred to himself as “tariff man.”
The group released data showing US consumers paid US$6 billion (RM 25.2 billion) in tariffs in June, up 74 percent from the year-ago period.
The conference call was organized in response to Trump’s announcement last week of plans to enact a 10 percent tariff on US$300 billion (RM 1.2 trillion) in Chinese goods on September 1, a move that would affect a broad swathe of consumer goods spared in earlier tariff rounds.
Separately, Consumer Technology Association warned Trump’s latest tariffs could lift payments on electronics and other items by US$1 billion (RM 4.2 billion) or more.
Participants said it is difficult in many cases to find suitable alternative suppliers to China because they may lack the infrastructure or knowhow on meeting US safety standards, such as for lead-free toys and other items.
Also, emerging manufacturing centers such as India and Vietnam may be reluctant to invest heavily in costly new infrastructure in case of a sudden US policy reversal under a sudden deal with China.
Hiking prices would dent sales, while a decision to eat the costs would harm the business, companies said.