The trade war between Washington and Beijing is set to take place in US consumers’ wallets.
From new phones to kitchen appliances and clothes, President Donald Trump’s additional 10% tax on Chinese imports could result in a slew of higher prices, write Theron Mohamed and Ayelet Sheffey.
With China sending $427 billion in goods to the US in 2023 (the most recent year of full data), there are no shortages of things that will be affected by the tariffs.
It’s not just expensive tech like computers and cellphones that’s at risk. The closure of a loophole allowing importers to avoid taxes on shipments valued less than $800 when sent directly to consumers has left brands like Shein and Temu scrambling.
Concerns about logistics continued yesterday when the US Postal Service said that it is suspending inbound parcels from China and Hong Kong until further notice, effective immediately. While only parcels are impacted, the suspension may cause exporters to use alternative logistics companies like DHL, UPS, and FedEx. That might cause a demand surge that could increase freight costs, an expert told BI.
PDD Holdings, Temu's parent company, was down 6% in premarket trading this morning following the USPS announcement.
Companies haven’t been shy about saying they’ll need to raise prices due to tariffs, and the taxes also provide cover to juice their costs regardless of the tariffs’ real impact.
Even trade plans that might never come to fruition — Mexico and Canada — could still cause enough uncertainty that they disrupt supply chains, leading to higher prices.
With so many unknowns, some investors are hedging their bets using outcome ETFs and monitoring 21-day realized volatility to reduce downside risk while not completely cannibalizing their returns.
If that all sounds like a foreign language to you, there’s always the prediction markets. Over there, you can wager on where some of President Trump’s next tariffs might land.
