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Here's how China trade war tariffs work: Eventually you'll pay extra for furniture, scooters … and a lot more

Robert Channick, Chicago Tribune on

Published in Business News

With China and the United States embroiled in an all-out trade war, companies are scrambling to find new overseas suppliers, even as they prepare to pass on the higher costs to their customers.

Everything from the mundane to the practical to the exotic -- washing machine parts, dining room sets, horsehair waste -- is on the growing list of products that, as of Friday, are scheduled to carry a 25 percent tariff to import from China.

While many companies are looking to source more goods from Vietnam and other countries to avoid the fee, they warn that higher price tags -- and, perhaps, a sales slowdown -- may be inevitable.

Walter E. Smithe, president of the eponymous Itasca, Ill.-based furniture company started by his grandfather in 1945, said the 25 percent tariffs raise its costs on leather upholstery, bedroom sets and dining room sets, among other furniture.

The All-New Chevy Silverado is built for one purpose – getting things done. Bigger, stronger and lighter, this new generation is a beautiful evolution of the most dependable, longest-lasting full-size pickups on the road.

"This will result in more expensive furniture nationwide," Smithe said. "Furniture is going to be more expensive in the next year."

 

The tensions over trade began last July, when President Donald Trump imposed 25 percent tariffs on Chinese technological goods and China retaliated with its own tariffs. Since then, the trade war has only escalated despite reports that both sides were making progress toward an agreement.

Stocks plunge as fallout from trade war with China hits markets

Last summer, China struck at the agricultural sector, imposing 25 percent tariffs on soybeans, beef, pork and other products. Then in September, the U.S. imposed 10 percent tariffs on a sweeping portfolio of $200 billion in Chinese goods, covering everything from seafood and bovine semen to chemicals and furniture.

After trade negotiations failed to reach an accord before an already extended deadline, Trump followed through Friday on threats to raise tariffs to 25 percent on the same $200 billion basket of Chinese goods. On Monday, China announced it will raise tariffs 25 percent on $60 billion in U.S. goods in retaliation. The Chinese-imposed tariffs are set to take effect on June 1.

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