Online shopping has become harder with tariffs implemented by Trump. Photo by CardMapr.nl via Unsplash.
After his victory in the 2024 presidential election, Donald Trump’s presidency has been highlighted by his economic measures impacting the entire world. His tariffs are currently set at 10% on many nations, including Japan, Singapore, Switzerland, and New Zealand. The President has gone as far as applying tariffs on an island solely occupied by penguins, showing that not even animals are safe from his economic policies on other continents.
More recently, President Trump has shifted his attention to China, prompting a trade war between the two nations. His recent executive orders call for a new tariff and sanctions on Chinese-made imported goods. Although Trump intends to “punish” China with this tariff, its effects are way beyond that. It’ll also affect American consumers who frequent Temu and Shein, Chinese Americans, and U.S businesses.
What is a tariff?
First, it’s important to understand what a tariff is. A tariff is a tax on imported goods paid for by importers. Tariffs increase government revenue and boost domestic industry, which is what President Trump is trying to do with his tariff on China. Ultimately, these tariffs are paid for by the American consumer (otherwise the importer in this situation), resulting in higher prices than before.
What is Trump’s tariff?
Starting May 2, parcels from Hong Kong and China will face a 145% import tax. Under this executive order, Trump’s tariff also prohibits Chinese companies from using the de minimis exemption, a 1938 tax exemption that exempted foreign companies from paying tariffs and additional taxes on packages under $800.
Temu and Shein
This tariff is set to affect the millions of shoppers who shop on Chinese platforms. Temu and Shein, which originated in China, are known for their low prices and wide variety of products, ranging from household goods, clothing, and stationery items. These companies combined bring in more than two hundred million American users each month, many of whom are low-income.
Trump’s tariff is set to affect the online shopping experiences of these individuals, who account for more than half of the total American population. For example, a $50 package worth of goods from China or Hong Kong is now $104 after the tariff. The price increase is extremely costly, not worth the money, and puts low-income Americans in a tough position when it comes to shopping online at affordable prices.
Chinese American Communities
But it’s not just big companies being affected by the tariff; local family-owned Chinese supermarkets will also be forced to raise prices. Cultural staples commonly sold at Chinese supermarkets, such as Laoganma, a popular chili spice, would increase in price with Trump’s tariff. The tariff not only endangers the livelihoods of these families but also lowers the affordability of ethnic groceries for Chinese Americans.
The Tariff on American Soil
Although the main focus of Trump’s tariff is Chinese companies, it’s not just Temu and Shein that this tariff would affect. The effects of the 145% import tax won’t just be found overseas – American businesses that rely on Chinese factories to manufacture their products would be affected as well. In 2021, U.S. imports from China were $506.4 billion, accounting for machinery, furniture, and other miscellaneous goods. Famous American companies such as Apple, Levi Strauss & Co., and American Girl have their products strictly manufactured in China. These companies are “importers” of their products, which are then sold in the United States. With that in mind, Trump’s new tariff and its 145% import tax will likely increase the prices of these products, making them more expensive for American consumers to purchase.
As economic tensions between the United States and China clash, it’s important to understand the effects of these tariffs at home and abroad. If you’re looking for a sign to make that impulse purchase, this is the perfect time to do so before the tariff hits.