SAN DIEGO (KGTV) — Consumers could see increases in costs of machinery, electronics, gas, food, and alcohol… if president trump’s tariffs go into effect. Those items are the top U.S. imports from China, Mexico and Canada.
“Can you explain how it trickles down to consumers?
“The importer will pay this tax, but then they will charge the person they're selling it to a higher price. So as it goes down the supply chain costs will be rising,” said Economics Professor Alan Gin at the University of San Diego.
Gin says importers and suppliers will have to decide how much of the tariff they're willing to pass on to consumers. Depending on the item, that amount will vary.
“The more competitive a market is, the less likely you're going to pass the tariff onto consumers because there will be a lot of competition.”
“What are the more competitive markets versus less competitive?”
“Autos would be less competitive; there’s only a few auto manufacturers so they’ll be able to pass that along. The food tends to have more competition so maybe the price will go up less than in terms of food.”
If the Trump administration follows through with a 25% tax on goods from Mexico and Canada.. And an additional 10 percent tax on Chinese products.. Experts estimate that the average household will spend up to $2,000 more a year. The cost of a new car could spike $3,000.
“If prices go up in the us and people cut back on their expenditures, that could hurt the economy in the sense that us businesses might have to cut back.”
President Trump saying he hopes to pressure other countries to stop drug trafficking into the United States. He also wants to bring back American manufacturing and create new jobs.. But Gin says it would be years before companies could expand and replace international imports.
