Trump Tariffs to Hit Coffee, Clothing, Electronics, and More

 

Starting August 1, the U.S. may hike tariffs on imports from key trade partners unless new deals are reached, potentially raising consumer prices. Products affected include coffee, rice, cocoa, seafood, apparel, and electronics.

Brazil could face a 50% tariff on coffee, Thailand up to 36% on jasmine rice, and China 30% on apparel. Electronics and copper imports may also see steep new duties. Economists warn the tariffs could increase business costs and dampen consumer spending.

Almost all coffee consumed in the U.S. is imported, making it particularly vulnerable to tariffs. Brazil, the top supplier of coffee to the U.S., faces a 50% tariff, potentially driving up prices for consumers. Vietnam, another major supplier, could see a 20% tariff.

With over 98% of clothing imports and 99% of shoes entering the U.S., the fashion and retail sectors are likely to be heavily impacted. China, Vietnam, and Bangladesh, key sources of apparel imports, are targeted with varying tariff rates. This could lead to higher costs for consumers and challenges for businesses, particularly fast fashion brands with thin margins.

Consumer electronics such as smartphones, tablets, laptops, and video game consoles are also in the crosshairs. Tariffs on goods from China, Vietnam, and Bangladesh, all major sources of electronics and components, are likely to raise prices on these items. 

The Consumer Technology Association estimates that a 10% tariff on Chinese imports, coupled with a 60% levy, could lead to a surge in prices, with laptops and tablets seeing the steepest hikes, potentially as high as 45%. Best Buy's CEO has already indicated that the tariffs will necessitate raising prices on a range of consumer electronics, given the high reliance on imported components in the industry.

A broad range of other products, including rice, cocoa, seafood, and even appliances, are also likely to be affected. Specific tariffs mentioned include a potential 50% duty on copper imports and tariffs impacting goods from India, according to Fox Business and USA Today.

Economists and research institutions like the Yale Budget Lab warn that these tariffs could significantly raise prices for American households. The Budget Lab's most recent estimate suggests an average loss of $4,900 per household, with lower-earning families being disproportionately affected. 

The Tax Foundation projects a potential $1,270 average tax increase per US household in 2025 due to tariffs. There are also concerns about a possible rise in inflation, potentially reaching 4% by year-end, according to EY's chief economist. Some analysts are even raising the specter of stagflation and a potential recession if the tariffs remain in place.

The current tariff regime involves a baseline 10% tariff on imports from all countries, with higher "reciprocal" tariffs imposed on nations with large trade deficits with the U.S. Negotiations with some trading partners have led to delays in the implementation of these higher tariffs, but the August 1 deadline is approaching. There is also a 20% tariff on imports from China related to fentanyl, as well as modifications to existing tariffs on goods from Canada and Mexico.

The overall sentiment among many economists and industry analysts is one of concern about the potential for increased consumer costs, disruption to supply chains, and negative impacts on the U.S. economy as a whole.