WASHINGTON – In September 2018, Minnesota companies that imported Chinese-made vacuum cleaners spent no money on tariffs. A month later they spent $2 million.
President Donald Trump's 10 percent protective tariffs on $200 billion worth of Chinese imports took effect Sept. 24, 2018. Since then, those tariffs have added to the acquisition costs of thousands of U.S. businesses in hundreds of product categories, a new study commissioned by the Consumer Technology Association (CTA) shows.
CTA is a trade group whose 2,500 members include Minnesota-based 3M and Best Buy. Its study found U.S. companies paid tariffs totaling $1.5 billion on Chinese imports in December 2018. A year earlier, they spent just $168 million.
Minnesota businesses fared a little better. They spent roughly $32 million in tariffs on Chinese-made products in December 2018. A year earlier, the figure was around $4 million.
When, or if, these cost increases lead to higher consumer prices is unclear, according to Daniel Anthony, who analyzed U.S. Census data for the CTA study.
"When to pass along price increases is a very specific, individual process for companies," explained Anthony, a vice president at the Trade Partnership consultancy. "What is pretty easy to say is that the longer these tariffs go on, the harder it is for companies to avoid [consumer] price increases."
The Trump administration placed the tariffs to gain leverage in negotiations with China over that country's theft of American intellectual property and what the White House said were unfair barriers to U.S. companies trying to do business in China, the world's second biggest economy.
U.S. Trade Representative Robert Lighthizer also wants to balance the trade deficit between the U.S. and China that now tilts strongly toward the Asian nation. American and Chinese trade negotiators continue to meet in hopes of cutting a deal that will avoid an increase in the current tariffs from 10 to 25 percent. This increased was planned to take effect Jan. 1, but has been delayed in hopes of reaching an agreement.