The trade war between the US and China has up to now mainly hit headlines, nervous traders and heated political debates, but there is no doubt consumers will feel the burnt too, says financial analyst Sara Hsu to Reuters. Moving away from China is mostly not an option, she says. “It can take up to five years to move from China to another country.”
U.S. tariffs on imports from China will not only impact companies but also the consumers said an expert in an interview with China Global Television Network in Beijing on Tuesday.
Sara Hsu is an associate professor of economics at the State University of New York at New Paltz. She said it was not clear what percentage of the tariffs the companies would pass on to the consumers but it would definitely impact the consumers.
“It’s definitely going to impact the consumers in terms of higher cost as well as the companies. So there might be a split in terms of the company taking part of the hit and passing part of cost on to the consumers as well. And starting from January 1, the tariffs will go from 10 percent to 25 percent. So that’s a really significant increase,” said Sara.
China is the largest supplier of textiles and apparel to the U.S. market, accounting for about 40 percent of American imports in the sector, according to the statistics of the United States Fashion Industry Association (USFIA).
The industry relies on sourcing from China to provide American consumers with affordable and varied choices. But the tariffs will impact the multinational companies in the U.S. in the industry, said Sara.
“A lot of the American multinational firms are producing their goods overseas. So that’s why the tariffs on exports from China are going to impact the American multinational companies. And these multinational companies would like to move to a different place, especially given the tariffs that just kicked in. But it’s really hard for them to do,” said Sara.
She added that there would be a high cost for the companies to move and set up shops in other countries with a level of development and have low wages.
It can take up to five years to move from China to another country, Sara said. The situation hasn’t happened yet, but a lot of companies are not reassuring to the U.S. instead of relying on automation in order to produce their products because American labor costs so high.
Are you looking for more experts at the ongoing trade war between the US and China? Do check out this list.