The tariff whip continued on Wednesday, with President Trump suspending “mutual” tariffs in most countries for 90 days, imposing even higher tariffs on China.
Slow China's tariffs could ripple over the US economy. Many of the appliances and discounted clothing purchased by Americans are shipped from China, which can increase the price of shoppers.
Here's what you need to know about the latest tariff developments:
What are the tariffs imposed on China?
Trump's mutual tariffs came into effect early Wednesday, but hours later he suspended taxation in most countries.
China was the exception. Trump said he would raise tariffs on Chinese imports to 125%. The result is that Beijing has unleashed a new retaliation against the United States.
Trump said the tariff goal is to encourage manufacturers to make more products in the United States. He and his advisors have admitted that it could mean a short-term rise in American prices, but Treasury Secretary Scott Bescent recently told NBC that America's prosperity is not about the ability to buy “cheap boring things from China,” but about restoring factory jobs that have been lost to foreign competition.
What other customs duties are valid?
The suspension means other countries have 90 days of reprieve from the higher rates that came into effect on Wednesday. Trump retained the 10% universal tariffs established on Saturday.
Several other previous tariffs remain in effect. Like imported vehicles, foreign aluminum and steel are subject to 25% tariffs. These taxes on imports can increase the price of items such as beer, car cans and cars. In fact, the impact of tariffs has already echoed through the automotive industry.
What could be more expensive due to Chinese tariffs?
There are more factories in China than factories in a combination of the US, Germany, Japan, Korea and the UK, and many of the products imported to the US come from China.
The increase in tariffs will have a major impact on the American economy, Wendong Chan. Cornell's assistant professor of applied economics and policy told the New York Times Wednesday. China is the leading source of imported household appliances in the US. It's 73% of smartphones, 78% of laptops, and 87% of video game consoles.
China also exports 77% of the toys that come to the US, Chang said.
Low-cost clothing can also be more expensive. According to Congressional Research Services, discount retailer Sheen and Temu rely on Chinese vendors, accounting for around 17% of the US discount e-commerce market, accounting for around 17% of the US e-commerce market. In addition to tariffs, these companies will affect the closure of loopholes that allow retailers to send goods directly to American consumers without paying taxes.
Will groceries become more expensive?
When Trump first introduced tariffs in Mexico and Canada in February, it appears likely that food prices will rise as Mexico and Canada are two of the biggest exporters of food to the United States. The president later suspended these tariffs under the provisions of the US-Mexico-Canada Agreement. This probably prevented the rise in customs related prices for products such as Mexican avocados and Canadian baked goods.
Still, the US imports food from many other countries, and food analysts warn consumers to expect a rise in prices for grocery aisles, especially perishable foods. Bananas and Peruvian grapes from Guatemala, for example, could be more expensive, as did Vietnamese and Indian seafood.
Shoppers can also increase coffee prices and increase with wines from the European Union, Argentina, Australia and other regions.
Do you need to stock up on something?
Considering the potential for high prices for a wide variety of products, consumers may feel like shopping.
Trump's announcement of tariffs led some Americans to start making postponed large purchases, including replacing appliances and purchasing new cars.
According to Bloomberg, some shoppers are also competing to replace their iPhones amid fears that prices could rise significantly. Apple manufactures around 90% of the Chinese iPhone, and even before additional taxes were added on Wednesday, analysts at Morgan Stanley estimated that tariffs would add billions of dollars to Apple's annual costs.
However, as Times' Money columnist Ron Lieber explained, there are some important considerations before making a large purchase at the moment. Buying extras for things can cost money, occupy space in your home and paying debt to make those purchases or speeding up big costs to beat potential price increases, and you can wipe out your savings. He also pointed out that price increases must be important and long-lasting, as price increases will outweigh the advance costs of purchasing extra products.
What does the stock market response mean to consumers?
Stocks rose sharply in news of a 90-day hiatus. The S&P 500 rose 9.5% on Wednesday, the sharpest daily profit since the 2008 financial crisis.
These benefits have recovered much of the lost ground since Trump announced the new tariffs on April 2, but the index is 11.2% below its latest high in February. Some analysts warn of more volatility. In the weeks since Trump began rolling out tariff plans, the market has been shaking with uncertainty.
And that volatility has put pressure on consumers who are investing in the market and planning to retire soon. A decline in stock prices could wipe out the savings needed to retire. Investors are scared of selling stocks, so they can miss out on future profits. Or, youths may be undermining their long-term profits as they are completely scared of investing in the market.
