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How Trump’s Proposed $200 Billion China Tariffs Could Affect You

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Americans may feel a sting in their daily lives from the next swath of tariffs that President Donald Trump threatens to slap on $200 billion worth of Chinese-made products.

Trump’s initial tariffs on $50 billion worth of Chinese imports steered clear of popular consumer products. But as he looks to put a 25% tax on an additional $200 billion of China-made imports, it’s almost inevitable that U.S. consumers would see price hikes on items as varied as fish, baseball gloves, vacuum cleaners, computers, luggage, tires, dog leashes, furniture, lamps and mattresses.

Last year, the U.S. imported $505 billion of goods from China, meaning this next round of tariffs would account for nearly 40% of Chinese imports.

Almost 23% of the targeted items on Trump’s $200 billion list are consumer products, according to an analysis conducted by the Peterson Institute for International Economics (PIIE), a nonprofit, nonpartisan economics research institution in Washington, D.C. For comparison, consumer products made up just 1% of the list of the initial $50 billion worth of made-in-China imports subject to added tariffs.

“I mean, when you get to $200 billion, you’re covering most everything,” said William Reinsch, Scholl Chair in international business at the Center for Strategic and International Studies, a bipartisan, nonprofit policy research organization based in Washington, D.C. Reinsch previously served as the president of the National Foreign Trade Council.

The new tariffs may take effect after public hearings are held, which end on Aug. 30. A hearing is scheduled from Aug. 20-23 at the U.S. International Trade Commission at 500 E Street SW, Washington D.C., beginning at 9:30 a.m.

Where would consumers be hit mostly?

Based on the import value in 2017, the PIIE analysts found the major consumer products targeted are:

  • furniture ($11 billion);
  • seats ($10 billion);
  • computers ($8 billion);
  • lamps, lighting and parts ($7 billion);
  • travel bags ($7 billion); and
  • agricultural and food products ($6 billion).

Affected household goods are:

  • cooking appliances ($3.8 billion);
  • vacuum cleaners ($1.8 billion); and
  • refrigerators ($1 billion).

To break down the list further:

Dozens of fish are on the hook for price increases. That includes tilapia, salmon, cod and trout. When you eat out, your restaurant bill may also go up if you order seafood like tuna, squid and octopus that come from China.

If you like to cook with typical Chinese food ingredients, you may find higher prices on lychees, sea urchins, garlic, bamboo shoots, dried mushrooms and monosodium glutamate (better known as MSG), which are on Trump’s list.

As you browse the aisles at your nearest big-box store, you may find household supplies with higher prices including toilet paper, facial tissue, paper towels and napkins, as well as dishes, plates and cups made of paper or paperboard.

Clothes and accessories made of leather or furskin, including belts, gloves and mittens may cost more. Also on Trump’s list: bed sheets, linens and towels.

And if you live in one of the more than 84 million U.S. households with a pet, take note: Prices of dog leashes, collars, muzzles, harnesses and dog and cat food may swing up, too.

You can check out the full list of more than 6,000 Chinese items subjected to tariffs here.

How would consumers be hurt?

Immediate impact

Some effects are immediate. On the one hand, tariffs would raise the prices of the made-in-China products that Americans buy in stores, but on the other, domestic producers may jack up the prices of their products, too.

“Usually what happens is that when the domestics discover that their competitions’ prices are going up, they’re tempted to raise their prices to take advantage of the situation,” Reinsch said. “They won’t raise it as high as the foreigners have to raise it, because after all, as long as they’re a little bit cheaper, they have an edge.”

In that sense, the consumer wouldn’t gain much if they switch from a Chinese product to the American-made version.

Reinsch estimated that consumers can see the effects rolling out between three and six months after the tariffs are imposed.

How much would prices go up?

It’s hard to predict whether American importers would ease the tariffs by paying themselves or pass part of or even the full cost onto their customers — it depends on the industry, alternative import sources and market conditions. As a result, consumers may not have to bear the full 25% tariff on every Chinese product, if it was to be imposed, experts say.

“Generally speaking, the more expensive the item, the more likely that the manufacturer or importer is to swallow a part of the tariff,” Reinsch said. “Otherwise, the cost will be pretty significant.”

Economists estimate that on average, about half of that unfavorable tax hike — 12.5% to 15%— would be passed on to customers, and the rest absorbed by the producer or manufacturer.

Shoppers who looked for washing machines this year may have already understood how tariffs affect consumer product prices. The price of imported washing machines shot up 16.4% three months after the Trump administration imposed 20%-50% tariffs in February, according to the American Enterprise Institute, a Washington, D.C.-based conservative think tank.

Indirect impact

Other effects are likely to emerge slowly, as 47% of the $200 billion tariff list comprises tens of billions of dollars of intermediate inputs — parts and components of final products — imported from China. Even though consumers don’t buy such things directly, they end up being incorporated or assembled into something else, and the additional costs will feed into the final products.

U.S. importers or producers may not be able to switch quickly to alternative suppliers in other countries, so American companies may have to pay the higher price for the parts and probably pass that cost onto consumers, said Gary Hufbauer, economist and nonresident senior fellow at the PIIE.

But even if American companies alter their supply chain and find a vendor that makes the same thing with comparable quality, the products probably won’t be as cheap as the Chinese parts used to be.

“If it was cheaper than the Chinese product, you would have found it a year ago, and you’d already be there,” Reinsch said. “So, it’s pretty certain that if plan A, which is China, suddenly becomes more expensive, it’s pretty certain that your plan B will also be more expensive — not as expensive as the tariffs but more than you were paying before.”

Either way, the consumers are going to lose, either from immediate price hikes or when the impact of the tariffs is sprinkled into the supply chain of a product that in part relies on Chinese components.

“[The tariffs] will all find their way finally to consumer prices,” Hufbauer said.

Take consumer technology products as an example.

A recent study by the Consumer Technology Association estimated that a 25% tariff on Chinese printed circuit assemblies and connected devices — an input into the production of a host of consumer technology products such as fitness activity trackers, wireless headphones, modems, routers, smartwatches and other Bluetooth-enabled devices — would lead to an average retail price hike of 6.2% on the final products.

Trade talks

In the lead-up to the new tariffs, the U.S. and China are scheduled to be back at the negotiating table in late August to ease trade tensions that have been built up in the past few months between the world’s two biggest economies. Experts interviewed by MagnifyMoney said the meeting would not likely affect the already-announced tariffs due to the tight negotiation window and a large number of issues dividing the two nations.

At best, the administration would delay the implementation of tariffs, and impose the tariffs in stages — perhaps at different rates for each stage, said Hufbauer.

In any case, it’s likely that over the time, individual Americans would feel the effect of higher tariffs when they check out at the country’s largest retailers.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Shen Lu
Shen Lu |

Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at [email protected]

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Here’s Why Single Women Are Buying More Homes Than Single Men

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Right after she turned 30, public relations pro Wendy Hsiao put in an offer on a cute brick townhouse in Atlanta. “For a lot of my friends, being an adult started either when you got married or had a baby,” she said. “I chose to buy a house.”

Why did she buy? She felt ready for a major life change, considered buying to be a smart financial decision and wanted a yard for her Pomeranian named Georgia. “I felt like it was time to make a place my home,” Hsiao said.

Her story is one example of a growing trend: the rise of single female homeownership. Single women are far more likely to become homeowners than single men, according to a study on singles owning homes by LendingTree, which owns MagnifyMoney. In fact, single women own 22% of homes on average, while single men own less than 13%.

This “gender gap” stems partly from the fact that single women prioritize homeownership when setting life goals. In fact, 73% of single women list owning a home as a top priority compared with 65% of single men, according to the 2018 Homebuyer Insights Report from Bank of America.

Single women are “skipping the spouse and buying the house,” according to the Bank of America report, which found that single women rank homeownership as a goal above getting married (41%) and having children (31%).

From homemaker to homeowner

While there’s still work to be done, women have taken huge steps toward professional and financial independence. Homeownership in particular contributes to economic stability, so it’s great that more single women are buying homes. There’s no doubt the increase in the number of women in the U.S. workforce, a figure that has more than doubled since 1975, has contributed to the trend. Here are some other driving forces behind the rise of single female homeownership:

Homeownership empowers women. Homeownership offers a place to live, stability and a way to build wealth, so it’s no surprise women view owning a home as empowering. In fact, 31% of single women (vs. 23% of single men) feel empowered when thinking about buying their first home. A licensed real estate agent in Chicago, Martina Smith bought a condo in her dream neighborhood of Streeterville after she broke off an engagement a few years ago. Her budget only allowed her to buy a “fixer-upper,” but she got a great deal and renovated her place. “It’s been very rewarding and empowering,” she said. And she thinks it reflects a bigger national trend. “We’re seeing more women taking charge,” Smith said.

Women are becoming more educated. Over the past few decades, women have become more educated than men. In 2017, 38% of women and 33% of men ages 25 to 64 had a bachelor’s degree. In that age group, 14% of women and 12% of men had an advanced degree. And women are putting off marriage to pursue that education, according to the 2018 Women in the Housing & Real Estate Ecosystem report. Educational attainment has a positive impact on homeownership rates.

Women are done waiting to marry. There’s been a cultural shift where women no longer feel they need to wait until they pair up to embark on certain aspects of “adulting,” said Kelley Long, a CPA and certified financial planner with Financial Finesse. “I will never forget a friend’s dad chastising me for doing ‘nesting’ things like buying nice furniture before I was married because of his perception that you just don’t do things like that until you’re married,” Long said, adding that women are “rejecting that idea because it’s not true.” If you want to marry in the future, the right partner will likely be impressed that you were financially secure enough to buy a home on your own, she said.

Single moms want a home base to raise kids. “Oftentimes, when people buy homes it’s for lifestyles reasons,” said Tendayi Kapfidze, chief economist for LendingTree. Getting married is one big reason, but having children is the other, he said. About 21% of U.S. kids live with single moms, a number that has almost doubled since 1968. In contrast, just 4% of kids live with single dads. “Children prompt people to buy homes,” he said. “So that might be one of the factors at play.” And it’s not just kids. As many as eight in 10 caregivers for elderly parents are women. The median age of a single female buyer is mid-50s, points out Jessica Lautz, vice president of demographics and behavioral insights for the National Association of REALTORS. A single female homebuyer “may be coming from a past relationship and purchasing a new home for herself, her children and her parents,” Lautz said, adding that single females are “willing to make sacrifices” to purchase a home.

So what does the future hold for single women owning homes? If marriage rates among all U.S. adults continue to drop, it’s likely the number of single women purchasing homes will rise even more, Lautz said.

Turn your homeownership dreams into reality

Strict lending standards can make it more difficult to qualify for a mortgage on a single income. Considering women also only make 80% of what their male colleagues earn, getting to a financially secure enough position to afford homeownership may feel daunting. Here are three tips for single women looking to buy a home of their own:

  1. Prep your finances for homebuying. It’s important to check your credit and your debt-to-income ratio before you start the homebuying process. If you spot problems, work on increasing your credit score and paying down your debt before you try to get preapproved for a mortgage. Getting the best possible rate can save you money over the life of the loan, which is especially important when your household depends on a single income. The upside is that single women have complete control and don’t need to worry about anyone else’s shaky credit or loads of debt. “If you’re in a couple, somebody is going to be dragging the other person down,” Kapfidze said.
  2. Build your nest egg before you buy. Forty-eight percent of women say they haven’t purchased a home yet because they haven’t saved enough for a down payment. But that’s not the only savings barrier to breach before taking the leap into homeownership. “Make sure you have a robust emergency fund,” Kapfidze said. Because single homeowners are on their own, they should set aside at least three months of mortgage payments as part of their emergency fund, Kapfidze suggested. “If you’re single, you’re the only one with income coming in to pay the mortgage,” he said.
  3. Pick a home that comes in under budget. Single women have lower household incomes than single men, so they may need to consider buying a smaller home, taking on a house that needs some work or settling in a lower priced neighborhood. The good news is that single women may be doing exactly that. In fact, the average home purchased by a single woman cost $173,000 compared with over $190,000 for a single man. Single women “may need to make price concessions when purchasing to find a home for themselves and their families,” Lautz said. And buying less house than you can afford can help you make your mortgage payment more easily if you hit financial hard times in the future.

Finally, it’s normal to feel stressed when you think of buying a home. In fact, more women (40%) than men (30%) feel overwhelmed by the idea of homeownership. But even though the homebuying process was scary, Hsiao said she has zero regret about buying a home of her own: “If you love the house, it’s 100% worth it.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Allie Johnson
Allie Johnson |

Allie Johnson is a writer at MagnifyMoney. You can email Allie here

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