Here’s how much American businesses paid for tariffs in June alone
August 9, 2019
As the year-long trade dispute between the US and China continues to escalate, American businesses and consumers are left paying the price for the mounting tariffs.
In June, American companies paid $6 billion in tariffs, one of the highest tariffed months in US history and a 74% increase from what was paid a year earlier. Approximately $3.4 billion of that total is from tariffs imposed in the past year by the current administration, according to Tariffs Hurt the Heartland, a coalition of US business groups.
The June figures, compiled from US Census Bureau data, highlight the first full month to include the latest tariffs imposed on Chinese goods. Those levies increased in May to 25% from 10% on $200 billion worth of Chinese imports.
The coalition noted that June saw a substantial increase in tariff totals despite the removal of steel and aluminum taxes on Canada and Mexico.
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Worst is yet to come
For American importers and consumers, the worst may be yet to come where tariffs are concerned, noted Tariffs Hurt the Heartland.
President Donald Trump stated he intends to place a 10% tariff on an additional $300 billion in Chinese imports as of September 1. Once that goes into effect, the average tax on Chinese-made goods will be more than 20%, according to new research from the Peterson Institute for International Economics.
“Americans are already paying record-high tariffs, and the biggest hit to consumers is still to come on September 1,” Jonathan Gold, Tariffs Hurt the Heartland spokesperson, said in a press release.
“Taxing hardworking Americans isn’t doing a thing to address China’s trade abuses. Instead, these tariffs are costing American jobs, raising prices, hurting farmers and derailing US economic growth.”
As of September 1, 97% of US imports from China will be covered by tariffs. The incoming tariff is expected to hit consumers’ wallets more than others so far. That’s because a wide array of consumer goods will be subject to the 10% tax, including clothing, footwear, electronics, toys, and even the Bible.
Since the beginning of the trade war in 2018 through to June, American taxpayers have already paid more than $27 billion in additional import tariffs, according to Tariffs Hurt the Heartland. Of that total, nearly 75% has been from taxes paid on Chinese products.
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American exports hit by retaliation measures
In addition to a hike in import taxes, American companies are also feeling the effects of retaliation measures, including tariffs and the suspension of certain purchases.
Chinese imports of American products plunged by 19% in July compared to a year earlier. And while that might seem like a substantial decline, it’s actually an improvement compared to the 31.4% drop in June.
In the first seven months of 2019, China’s imports of US goods declined by 28.3% compared to a year earlier, according to the General Administration of Customs of China.
Tariffs Hurt the Heartland also pointed out that in the 12 months through to June 2019, US imports of Chinese goods subject to tariffs fell by nearly $21 billion, while American exports hit by retaliation measures dropped by almost $25 billion.
American exports to China are likely to decline further after Beijing’s recent announcement that Chinese companies have suspended purchases of American farm products.
A study prepared by Trade Partnership Worldwide found that if 25% tariffs are imposed on all remaining imports from China and punitive measures follow, the US economy could lose more than two million jobs over the next few years and the GDP could drop by 1%.
“It’s never been more clear that tariffs are a failing strategy. Behind today’s market turmoil are real Americans who have been used as bargaining chips in this trade war,” said Gold in an earlier statement.
Trade negotiations between the US and China are slated to resume in September. But given the increasing tensions, some analysts think it’s unlikely that a deal can be reached prior to the 2020 presidential election.
Meaning the projection by Tariffs Hurt the Heartland is, unfortunately, likely correct: the worst is yet to come.
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