Donald Trump assures him: his massive customs duties will make the United States richer, even ensuring on Friday that it “will not change” its policy, despite the fall in the markets. If this assertion remains to be verified, a certainty is essential today: its famous tariffs should not only affect trade abroad, but also American households. Food products, automotive, high-tech, textiles … Many consumer sectors will be affected by a possible price increase, at a time when Americans already complain about the drop in their purchasing power.
More expensive essential foods
The United States imports an increasing part of the fresh fruits and vegetables it consume, according to figures from the Ministry of Agriculture. A large part comes from Canada and Mexico, two countries not immediately affected by the customs duties announced on Wednesday, but also subject to surcharge.
For the rest, some products should be affected such as bananas imported from Guatemala, Ecuador and Costa Rica, all subject to new customs duties from April 5, in this case at the rate of 10 %.
Coffee, of which around 80 % is imported according to the ministry, should see its price increase, the main exporters, Brazil and Colombia, being soon struck by 10 %. Imports of olive oil and alcohol from Italy, Spain or Greece will be affected by the new 20 % tax imposed on the European Union from April 9.
Rice flavored with Thai jasmine will be subject to 36 %rights, while Basmati rice, such as shrimp from India, will be under 26 %tax.
Wines and other European products more expensive for professionals
In addition to imported fruits and vegetables, a whole bunch of foods mainly produced in Europe will be more expensive for Americans. With AFP, Andrew Fortgang, who runs three restaurants and a wine cellar in Oregon, expects to have to pass on certain costs on its customers by increasing the prices of its menus. “About 25 % of our income comes from imported wine,” he explains, calling the prospect of “frightening” to see this income disappear. Beyond that, “from oil to mustard, cheeses and meats, they are simply not interchangeable, they are not made here,” he worries.
For Ben Aneff, president of the US Wine Trade Alliance, which represents the branch of wine and alcohol trade, the new customs duties constitute “a disaster for small businesses”. “Restaurants depend on significant margins to finance the rest of their activities,” he said, adding that “consumers will likely see prices increase. “We import approximately $ 4.5 billion (wine) in the EU and US companies draw nearly $ 25 billion from these imports. There is no solution to this problem, ”he adds.
The automobile also affected
In addition to the measures announced on Wednesday, the Trump administration also implemented 25 % customs duties on vehicles that are not manufactured in the United States, which, according to analysts, could increase the cost of a car by several thousand euros.
Volkswagen has already warned its American dealers that he planned to add costs to the price of imported vehicles in the United States from Mexico or Europe.
According to Bank of America, manufacturers could decide to increase their prices by $ 10,000 (for cars sold on average to 48,000 dollars) if they want to protect their margins. But some manufacturers could cut on their margins, while waiting to produce in the United States, and limit increases to $ 4,500. Consequence: American consumers threw themselves into concessions in March to order before these increases.
High-tech not spared
On the technologies side, the American consumer should not be spared either, taking into account the quantity of products manufactured or assembled in India and China. Despite the measures taken to expand its supply chain, Apple still manufactures the vast majority of its iPhone in China, through the Taiwanese supplier Foxconn. In total, China will be overwhelmed with customs duties of 54 % from April 9.
China replied this Friday by imposing 34 % taxes in turn on all imports of American goods and by entering the World Organization for International Trade (WTO) in the process. The Chinese Ministry of Commerce has also announced export controls on seven rare land elements, including gadolinium, used in particular in magnetic resonance imaging, and yttrium, used in consumer electronics.
American lovers of iPhones, who represent up to 70 % of sales, remain “relatively more inclined to accept price increases”, tempers Ming-Chi Kuo, specialist in the apple brand.
The more expensive textiles also
The actions of clothing and textile companies, which depend on a cheap workforce in countries like China and Vietnam, fell sharply on Thursday, Nike losing more than 13 % and Gap more than 20 %. New customs duties mean that imports to the United States from China or Vietnam will be more expensive.
The LAB budget of the University of Yale considered that the effect of all customs duties announced until April 2 would result in a 17 % increase in the cost of clothing and textiles in general. According to this reflection center, the global effect on the prices of customs duties announced so far is equivalent to an average annual loss of $ 3,800 (3,400 euros) per household.
The fear of a recession
According to the calculations of Adam Turnquist, analyst for LPL Financial, these announcements imply that the average rate of tax on imported products will increase to “almost 20 % (or more)”, against 2.3 % in 2024. Customs duties are set to American soil, by importers, and generally passed on to buyers. Companies cannot review their production model overnight and will take additional costs.
Consumers, already wrung out by the cost of covid post-pandemic living, are at risk of reducing their expenses, especially since they see in parallel the value of their economies-often placed on the financial markets-melt. In the event of a response from the targeted countries, via additional taxes on American products, the United States will also find it more difficult to export, which will penalize national activity.
The markets are increasingly rolling up the possibility of a recession, while the economy was flourishing just a few months ago.