Concerned about escalating prices, some Americans took advantage of storing beer, clothes, TVs, laptops, cars after Mr. Trump announced the reciprocal tax imposition.
John Gutierrez (Austin, Texas) has considered buying a new Laptop Taiwan brand for the whole year to serve the photography work. The turning point for him to lower his determination took place on April 2, when US President Donald Trump announced a new import tax rate on a large scale, including 32% reciprocal tax for Taiwan.
Right that day, Gutierrez went down to buy a laptop worth $ 2,400 in New York. “I think stop just keeping both the latest technology and not having to worry about import tax,” he said.
Also at Texas, Cedar Roach, Southern Methodist University quickly paid US $ 244 for the application of Lululemon clothes (Canadian brand) and the 150 USD sweater of House of Sunny (British brand) while Mr. Trump’s reciprocal tax press conference was broadcast on Radio on 2/4.
At the same time, her boyfriend, Sean Mackenzie, rushed out to buy three whirlwinds, each whirlwind of eight cans, about the vegetable compartment in the refrigerator. “I know what is vulnerable and what I want so I won’t be delayed,” Roach said.
Steve Hankins and Julie sought to buy household items at Riegelmann’s Appliance on April 3. Image: AP
From last month, Americans were worried about Mr. Trump’s tariff announcements. The expectation of inflation soared in the psychological survey of consumer psychology of the University of Michigan in March. However, many people apply the waiting approach and consider before adjusting spending. They thought that the president threatened war as a negotiating tactic.
But on April 2, the threat came true. On social networks, billionaire Mark Cuban suggested that consumers should take advantage of shopping. “From toothpaste to soap, anything you can find the storage, buy before the supermarket has to add inventory,” he said.
According to him, even if the goods are manufactured in the US, the price will increase due to the blame for tariffs. At supermarkets and electronics stores, some customers seem to have obeyed Cuban advice, pulling trolleys filled with goods.
Noel Peguero, 50 years old, action from April 2 to April 3, estimated to spend about $ 3,000 on electronics, auto parts, gardening equipment and other household appliances. “Now is the time to shop,” Peguero brought a 40 -inch Hiaense TV, a Chinese brand, boarding a car in New York. He had to go to the third store to buy a $ 217 TV due to out of stock in two other locations.
In Arlington, Virginia, Rob Blackwell and his wife need new cars to make long trips. Their current car is old and is about to be transferred to her daughter. “I told my wife that I had to change the car and I watched what the President would do with the import tax,” he said.
But this time, instead of owning, Blackwell chose to hire for more economy and technology that changed too quickly. He kept an eye on the General Motors Optiq assembled in Mexico, which could be affected by President Trump’s tax.
Immediately after hearing the news of the new tax, Mr. and Mrs. Ha and his wife signed the car rental contract. The agent still retains the agreed term when the tax is announced. “If the government has chosen that direction, I have to act immediately,” Rob said.
About 3 days after the reciprocal tax was announced, some Americans rushed to shop before the price increased. Others continue the usual rhythm and say they will solve the problem if and when the shelves adjust the listed price.
The White House hopes that reciprocal taxes will force countries to open markets with American goods, thereby leading to negotiations that can help reduce taxes, or cause businesses to transfer production to the US to avoid high import tax. Meanwhile, in the meeting room, in the forecast and speech in the media, economists warn these tax rates will cause daily prices to increase.
American consumers shop in Chicago, Illinois on November 22, 2022. Image: Reuters
Paul Donovan, Chief Economy UBS Global Wealth Management said tariffs were often applied at the beginning of the supply chain. Therefore, each time the tax increases 10 percentage, it often leads to consumer prices to increase by about 4 percentage points.
According to him, some companies have accumulated goods to prepare for taxes, which can slow down the price increase process. However, in general, manufacturers and wholesale manufacturers in the US have the same inventory ratio in 2018.
“This shows that there is only a slight delay before the price starts to rise. Some companies may have started to increase prices before the tax is applied,” Paul said. Retailers even have a lower inventory rate in 2018, so when the price increases in the supply chain, the impact will quickly transmit to consumers.
Calculation of Economic Professor Niven Winchester at Auckland Technical University (New Zealand) said that the impact of Trump’s total tariff policies can make each US family cost an additional $ 3.487 if trading partners respond and $ 1,188 in the US scenario.
On Friday (4/4), the President of the US Federal Reserve (Fed) Jerome Powell said the proposed impact of tariffs on the economy and inflation “much larger than the prediction”. According to him, they may lead to “at least temporary inflation” but also note that “this effect may last longer”.
According to Mr. Powell, the full impact of the tariffs is unclear and the Federal Reserve will stand out until there is more information about the economic situation. “There is a lot of waiting and observing, including us,” he said.
*The possibility of US economic recession before and after the reciprocal tax announcement
| Research unit | Before April 2 | After 4/4 |
| J.P.Morgan | 40% | 60% |
| Goldman Sachs | 20% | 35% |
| S&P Global | 25% | 30-35% |
| HSBC | – | 40% |
On the same day, JPMorgan raised the forecast of a recession in the US to 60% from 40% earlier. S&P Global also raises the probability of degradation from 30-35%, from 25%. Last week, Goldman Sachs also raised the probability of recession in the US to 35% from 20%, note that the basic elements of the economy were not as strong as in previous years.
Other research companies include Barclays, Bofa Global Research, Deutsche Bank, RBC Capital Markets and UBS Global Wealth Management Warning the largest economy in the world facing the risk of higher recession this year if Trump’s new tax policies are still applied.