Tariffs will now cost American households up to $1,000 per year: J.P. Morgan
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Tariffs are expected to cost American households up to $1,000 per year when the next round goes into effect on September 1, according to a new note by J.P. Morgan.
According to the bank’s analysts, the cost of the U.S.-China trade war borne by consumers is likely to rise from around $600 per year — based on the first two “phases” of the tariffs on Chinese imports — to around $1,000, based on the third round of tariffs.
That $1,000 figure assumes a 10% tariff on about $112 billion of Chinese imports, which U.S. President Donald Trump announced will begin next month. While he had initially proposed 10% tariffs on $300 billion worth of Chinese goods, he later scaled it back to exclude certain consumer products like cell phones, laptops, and toys.
If the tariff increase to 25% — as President Trump has threatened — the cost to consumers would rise to $1,500 per year, J.P. Morgan stated.
“What distinguishes China Phase III tariffs from preceding tariffs is the impact to Consumption and Capital goods,” analysts wrote. While previous tariffs focused more on “intermediate goods,” this batch “suggests that the expected consumer impact should be larger in the latest round,” the bank’s analysts wrote.
But rich people are getting rich, so who cares?