Tariffs changing shopping habits of US consumers
More U.S. shoppers are noticing price increases for the products they buy regularly, and a majority of them plan to reexamine their shopping habits if U.S. tariffs on Chinese goods remain in place, according to a new survey.
Shopkick, the operator of a shopping rewards app, surveyed more than 30,000 of its users between 28 and 30 June, and found 44 percent of respondents planned to cut down on their shopping as a result of raised prices on consumer goods, the result of tariffs imposed by U.S. President Donald Trump on practically all Chinese goods, valued at more than USD 550 billion (EUR 495.6 billion) in annual trade.
At the beginning of August, Trump said he would seek to impose a 10 percent tariff on the remaining USD 300 billion (EUR 270 billion) in goods the U.S. imports from the world’s most populous country, after previous rounds of tariffs had been imposed on USD 250 billion (EUR 225.3 billion) worth of goods.
In the Shopkick survey, 38 percent of respondents said they expect a household cost increase of up to USD 500 (EUR 445), and 30 percent said they anticipate that cost increase will be more than USD 1,000 (EUR 890). Sixty percent of shoppers said they plan to “adjust the retailers at which they shop,” and 25 percent said they will switch to buying more American-made goods.
“If the tariffs announced by the current administration are implemented, annualized consumer cost is likely to double,” Shopkick said in a release announcing the survey results. “While the arrival and scope of the tariffs remain uncertain, it’s clear that consumers are thinking ahead and plan to adjust their shopping habits and destinations, ushering in a new age of consumer shopping habits that American retailers will be forced to adapt to.”
Shopkick found Baby Boomers to have the highest awareness of the tariffs of any generational bracket, at 74 percent, compared to just 34 percent of Gen Z respondents. Different generations are having different responses to the tariffs: 50 percent of Millenials said they would cut down spending, while 62 percent of Baby Boomers said they would seek alternative shopping options rather than reduce their spending.
Tariffs Hurt the Heartland, the national campaign against tariffs supported by more than 150 trade associations representing retail, tech, manufacturing, and agriculture sectors, including the National Fisheries Institute, said Americans have already paid USD 22 billion (EUR 19.8 billion) in higher tariffs since the trade war began. Of that total, more than USD 3.4 billion (EUR 3.1 billion) came in June 2019.
“Based on monthly tariffs on imports Americans have paid thus far, every second the trade war drags on costs Americans USD 810 [EUR 730]. While that number alone is far too high, it doesn't include the cost of retaliatory tariffs that are causing exports to plummet, or the price of programs that are paying our farmers for the losses they have incurred, or the tariffs’ ripple-effects on the broader U.S. economy. It also doesn’t include the cost of uncertainty the trade war has created that is preventing American businesses from being able to plan for the future, invest, and grow,” the organization said in a statement.
Consumers should expect to pay more as the newest round of tariffs goes into effect between September and December of this year, Tariffs Hurt the Heartland spokesman Jonathan Gold said in a statement issued after Trump announced his latest round of tariffs would be spread through December to avoid damage to the holiday shopping season.
“While we appreciate the delay of some of the tariffs, this clearly shows that the administration recognizes that tariffs are taxes paid by Americans. It appears the administration understands that taxes on everyday products such as toys, clothes, and electronics would be politically unpopular and hurt those who can least afford it,” Gold said. “The vast majority of tariffs … are driving uncertainty, putting farmers out of business and causing small businesses to slow hiring. Instead of picking temporary winners and losers and holding the U.S. economy hostage, it is time to reach an agreement that finally puts an end to the trade war.”
Both imports to the U.S. and the country’s export sector have suffered as a result of the tariffs, Gold added. Over the last year, U.S. imports from China subject to tariffs dropped by USD 21 billion (EUR 18.9 billion), and U.S. exports subject to retaliation fell by USD 25 billion (EUR 22.5 billion).
“Ultimately the U.S. is paying a lot more tariffs, and buying somewhat less,” Dan Anthony, vice president of The Trade Partnership, told CNBC.
Gold said retailers should be concerned about shifting consumer habits becoming permanent, even if and when the trade war ends.
“The American people are facing one of the largest tax increases in decades due to the unprecedented tariffs we’ve seen over the past year,” Gold said. “These unilateral tariffs are erasing the benefits of tax reform and raising costs for American businesses and families. We all agree China is a bad actor and must be held accountable, but a massive tax hike on Americans isn’t the answer. It’s time for Congress, which never approved these tax increases, to step up and take back its authority on trade.”
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