Report: Tariffs taking toll on U.S. businesses, consumers — and labor market
Tariffs cost American business and consumers $6.8 billion in July, the highest monthly total in U.S. history.
That’s according to new data released Wednesday by Tariffs Hurt the Heartland, a coalition of more than 150 associations, including the National Retail Federation, from every sector of the U.S. economy. The $6.8 billion in overall tariffs paid represents a 62% increase from July 2018, driven by $3.5 billion in new tariffs on goods imported from China.
July marked the first full month of data collected after tariffs on many of those products increased from 10% to 25% earlier this year. The data does not include recent and upcoming tariff increases on nearly $300 billion in additional imports.
The trade war is also impacting the U.S. labor market, according to forecasting firm Moody’s Analytics. It estimates that Trump’s trade war with China has already reduced U.S. employment by 300,000 jobs, compared with likely employment levels absent the trade war, reported Yahoo Finance. Moody’s chief economist, Mark Zandi, told Yahoo Finance that the job toll from the trade war will hit about 450,000 by yearend if there is no change in policy. By the end of 2020, the trade war will have killed 900,000 jobs, on its current course. The hardest-hit sectors are manufacturing, warehousing, distribution and retail, according to the report.
“These historic tariff increases are what’s causing significant uncertainty for American employers, leading to less investment, higher prices and fewer job opportunities,” said Jonathan Gold, spokesman, Tariffs Hurt the Heartland. “You can’t budget for a double-digit tariff increase, and you can’t plan a business when you’re living tweet-by-tweet. The administration needs to use upcoming negotiations to end a trade war that truly has no winners.”
In total, American taxpayers have now paid more than $30 billion in extra import tariffs from the beginning of the trade war in 2018 through July of this year, according to the report. The new data released also showed how the trade war and retaliatory tariffs are dragging down American exports. The July data shows that American exports being targeted for retaliation have now declined for thirteen straight months when compared to the same month in the previous year.
While the tariffs paid by Americans are at historically high levels, the situation has only grown worse in recent weeks. Tariffs on products currently at 25% are now set to increase to 30% on October 1. Tariffs of 15% an additional $112 billion (List 4a) in Chinese imports just took effect on September 1, and another $160 billion in Chinese imports (List 4b) will face 15% tariffs on December 15. The data shows that U.S. businesses brought in $26.4 billion in products included on Lists 4a and 4b in July.
The new data released is part of a monthly Tariff Tracker that Tariffs Hurt the Heartland has launched in conjunction with The Trade Partnership, which compiles monthly data released by the U.S. government. The monthly import data is calculated using data from the U.S. Census Bureau. The monthly export data is compiled using data from the Census Bureau and the U.S. Department of Agriculture. As part of the Tariff Tracker project, Tariffs Hurt the Heartland is also releasing data on how individual states have been impacted by increased import tariffs and declining exports.
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