The Newest Tariffs Will Hit Consumers Harder The latest round of tariffs on Chinese imports is expected to hit more products U.S. consumers actually buy, and businesses say they have no choice but to pass the added costs on to consumers.

New Round Of Tariffs Takes A Bigger Bite Of Consumers' Budget

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The price of stuff, lots of stuff, from canoes to floor lamps to bicycles, went up literally overnight - last night, in fact. The Trump administration raised tariffs on $200 billion worth of imported Chinese products. The U.S. and China are in trade talks this week; but so far, no deal. NPR's Yuki Noguchi has the story.

YUKI NOGUCHI, BYLINE: Jim Kittle's family furniture business has operated throughout Indiana for nearly nine decades.

JIM KITTLE: It was started by my grandfather, then my father.

NOGUCHI: What kinds of things do you carry on your shop floor?

KITTLE: Bedroom, dining room, living room, occasional tables...

NOGUCHI: Kittle's Furniture will have to reprice new shipments of all kinds of furniture, from nightstands to love seats. The new tariffs increased from 10 to 25%, raising the underlying cost of Chinese-made items.

What percent of the stuff that you have on the floor would you say is affected by the tariff?

KITTLE: I think about 30%.

NOGUCHI: But much of the remaining 70% of goods are also affected.

KITTLE: Much like automobiles, parts of those goods are produced offshore, some in China.

NOGUCHI: Kittle's been through this before. Last September, a 10% tariff took effect. Back then, Kittle and his Chinese suppliers agreed to absorb most of that. The cost to consumers only increased 3%.

This time around, his suppliers can't afford to do that, and neither can Kittle or other retailers.

KITTLE: The vendor is no longer going to be able to take anymore. The retailer is not going to be able to absorb it because right now, retailers are at best marginally profitable. And furniture is no different.

NOGUCHI: Existing tariffs are already making life more expensive. They've increased consumer costs by $1.4 billion a month, according to the Federal Reserve Bank of New York. To date, tariffs have largely affected raw materials, like chemicals and wooden beams used to make other products. New tariffs will affect a larger number of finished goods - things consumers actually buy, like bicycles.

Katheryn Russ is an economics professor at the University of California at Davis. She says the latest round of tariffs will add another $500 a year in costs for the average American household. And that could grow. President Trump has pledged to broaden tariffs even further to all Chinese imports, including big-ticket items.

KATHERYN RUSS: Once the tariff goes on to cellphones, I mean, then you're really going to see people scream.

NOGUCHI: Determining a sticker price will be a dilemma for Jim Kittle. How customers will react is not Kittle's only worry. Indiana's main industries include farming and carmakers. Those are dealing with retaliatory tariffs China imposed on American goods. So Kittle's customers are already squeezed.

KITTLE: If they don't have the money even to buy a tractor, they're probably not going to buy furniture.

NOGUCHI: That is indeed what's happening not far from one of Kittle's stores in Lafayette, Ind. Since China imposed tariffs last fall, farmer Brent Bible has nowhere to sell his soybean and corn crops. And that situation just got worse.

BRENT BIBLE: Just in the last three days of trading, we've seen the price reduction that equates to about a $50,000 loss for us.

NOGUCHI: Bible points out that he's also a consumer. And increased tariffs on steel and aluminum have raised prices on tractors and farm equipment he needs.

BIBLE: We are buying those products at an increased price, and we're paying that tariff.

NOGUCHI: As a supplier and as a consumer, he says, tariffs are hitting him on both ends.

Yuki Noguchi, NPR News, Washington.


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