Although there is no official trade war between countries, the American president believes that his Chinese counterpart is not doing enough to sign relevant agreements and try to end a stalemate.
As a result, the United States regularly increases customs duties on products imported from China, exposing its citizens to additional costs. On September 1, another round entered into force and it is not over yet, because the Donald Trump administration is talking loudly about a much higher level if the negotiations do not bring the expected results. How will this affect American families, because they bear all the costs of political power skirmishes? The Congressional Budget Office forecasts that this means a decrease in gross domestic product (GDP) by 0.3% by 2020.
According to economists Kirill Borusyak from University College London and Xavier Jaravel from the London School of Economics, the average American family will experience a loss of USD 460 before the end of the year. Of course, these are only estimates based on spending habits, but we are talking about an increase in annual costs in the range of USD 300-1000 before the end of this year. And it is worth noting here that the calculations do not take into account the next rounds of customs rounds, planned for the next months, which will cause a significant increase in the prices of all electronics, because most are produced in China.
It will be much more severe than in the case of food or clothes and, as usual, it will hit the poorest the most, because as we know, import charges have a disproportionate impact on various social classes. Economists, however, are relatively optimistic, because in their opinion limiting themselves to necessary purchases should not lead to bankruptcy tipsdump. Organizations like the National Retail Federation have a different opinion, claiming that the impact of such government policies on the national economy and small businesses is too great to downplay and ignore.
It is hardly surprising, then, that the largest producers have begun to look for an alternative to Chinese production, which at the current level is completely unprofitable – the corporations do not want to take on additional costs, just as customers will not want to pay extra, so the matter is obvious. It is worth mentioning here that Google has already begun the process of transferring part of the production of Pixel smartphones to Vietnam, and Google Home smart speakers to Thailand, while Foxconn is planning two more factories in India, where it will produce more iPhones for Apple. Similar steps have also been taken by other producers who do not intend to wait for the situation to normalize, especially since there is no guarantee that it will not happen again in the future.