United States and China on September 1 put in place ir latest tariff increases on each or’s goods, potentially raising prices Americans pay for some clos, shoes, sporting goods, and or consumer items before holiday shopping season. 15% U.S. taxes apply to about $112 billion of Chinese imports. All told, more than two-thirds of consumer goods United States imports from China w face higher taxes. ministration h largely avoided hitting consumer items in its earlier rounds of tariff increases.

President Donald Trump said U.S.-China tre talks were still on for September. “We’ll see what happens,” he told reporters as he returned to White House from Camp David presidential retreat. “But we can’t allow China to rip us off anymore as a country.”

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Effects of soaring tariff on US

But with prices of many retail goods w likely to rise, Trump ministration’s move threatens U.S. ecomy’s main driver: consumer spending. As businesses pull back on investment spending and exports slow in face of weak global growth, American shoppers have been a key bright spot for ecomy. Moreover, many US companies have warned that y will be forced to pass on to ir customers higher prices y will pay on Chinese imports. Some businesses, though, may decide in end to absorb higher costs rar than raise prices for ir customers.

“We have got a great ecomy,” said Sen. Pat Toomey, R-Pa. “But I do think that uncertainty caused by volatile tariff situation and this developing tre war could jeopardize that strength, and that growth, and that is, I think, that’s a legitimate concern,” he told ABC’s “This Week.”

A study by J.P. Morgan found that Trump’s tariffs will cost aver US household $1,000 a year. That study was done before Trump raised Sept. 1 and Dec. 15 tariffs to 15% from 10%. president has also anunced that existing 25% tariffs on a separate group of $250 billion of Chinese imports will increase to 30% on October 1. That cost could weaken an alrey slowing US ecomy. Though consumer spending grew last quarter at its fastest pace in five years, overall ecomy expanded at just a modest 2% annual rate, down from a 3.1% rate in first three months of year.
ecomy is widely expected to slow furr in months ahe as income growth slows, businesses delay expansions and higher prices from tariffs depress consumer spending. Companies have alrey reduced investment spending, and exports have dropped against a backdrop of slower global growth. Americans have alrey turned more pessimistic. University of Michigan’s consumer sentiment index, released Friday, fell by most since December 2012.

“ data indicate that erosion of consumer confidence due to tariff policies is w well underway,” said Richard Curtin, who oversees index.

Some retailers may eat cost of tariffs. Target confirmed to Associated Press that it warned suppliers that it won’t accept cost increases arising from China tariffs. But many smaller retailers won’t have bargaining power to make such demands and will pass costs to customers. Philip Levy, chief ecomist at San Francisco freight company Flexport who was an viser in President George W. Bush ministration, said it’s hard to say for sure when latest tariffs may hit U.S. customers in form of higher prices.

But, he ded, “If you h to pick a time to do it, this is worst possible time” because it’s when bulk of holiday goods are brought into country.

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Authorities in China charging higher duties

In China, authorities began charging higher duties on American imports at midday Sunday, according to employees who answered phone at customs offices in Beijing and sourn port of Guangzhou. y declined to give ir names. Tariffs of 10% and 5% apply to items ranging from frozen sweet corn and pork liver to marble and bicycle tires, government anunced earlier. After Sunday’s move, 87% of textiles and clothing United States buys from China and 52% of shoes will be subject to import taxes.

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Second round of tariffs 

On December 15, Trump ministration is scheduled to impose a second round of 15% tariffs — this time on roughly $160 billion of imports. If those duties take effect, virtually all goods imported from China will be covered. Chinese government has released a list of American imports targeted for penalties on December 15 if U.S. tariff hikes take effect. In total, Beijing says Sunday’s penalties and planned December increases will apply to $75 billion of American goods. Washington and Beijing are locked in a war over U.S. complaints that China steals U.S. tre secrets and unfairly subsidizes its own companies in its drive to develop global competitors in such high-tech industries as artificial intelligence and electric cars.

“I give president credit for challenging China on some of its really egregious behavior” on intellectual property and techlogy transfers, for example, Toomey said. He said he hopes that’s what Trump’s focus is, “t just fact that Chinese clothing and shoes are popular among consumers. That’s t problem.” If China changes its behavior “in a meaningful way in that area ... n we will have ended up in a better place. That’s what I’m hoping for. But let’s be honest. In meantime, we’re doing dam. It’s a double-edged sword,” he said.

To try to force Beijing to reform its tre practices, Trump ministration has imposed import taxes on billions of dollars’ worth of Chinese imports, and China has retaliated with tariffs on U.S. exports. Trump has insisted that China itself pays tariffs. But in fact, ecomic research has concluded that costs of duties fall on US businesses and consumers. Trump h indirectly ackwledged tariffs’ impact by delaying some of duties until December 15, after holiday goods are alrey on store shelves.

“It’s a good thing taking on China. Unfortunately, he’s done it wrong way...To take on China re has to be a multilateral approach. One country can’t take on China to try to dry up its overcapacity because y just send it through to you in or ways,” said AFL-CIO President Richard Trumka said on “Fox News Sunday.”

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