With fresh U.S. tariffs on Chinese goods taking effect Monday, company reports and prominent sentiment gauges are flashing early warnings for the economy.
President Donald Trump’s trade battles are already triggering economic warnings — and rising danger for Republicans just ahead of the midterm elections.
As fresh U.S. tariffs on $200 billion in Chinese imports take effect Monday, surveys show consumers growing increasingly worried about higher prices this fall. Giant retailers such as Walmart are warning of price increases for manufactured goods. And smaller businesses in swing states and districts from Washington state to Iowa to Tennessee are complaining bitterly about big hits to their exports.
The economic fallout from Trump’s skirmishes with China, Canada, Mexico and the European Union risk making an already tough cycle for Republicans even more brutal, giving Democrats a chance to peel away voters linked to influential industries — like Washington state cherry farmers and Tennessee bourbon makers — who have long supported business-friendly Republicans.
“Where you have real-world effects of the trade war, you see people’s opinions sour dramatically,” said Scott Lincicome, a trade lawyer and adjunct scholar at the Cato Institute who is studying the links between public opinion and trade. “You look at places like Washington state where people are dependent on exporting cherries and apples, or rust belt states that border Canada, or Tennessee with auto and bourbon makers, and you are going to see close races where this is actually a decisive issue.”
The latest impact will begin to hit Monday as new 10 percent tariffs Trump slapped on over $200 billion in imports from China are scheduled to go into effect. That tariff rate is set to rise to 25 percent on Jan. 1 if the Chinese don’t capitulate to White House demands. Trump has also threatened to bump the total up to over $500 billion in imports, which would hit nearly every product China exported to the U.S. last year.
Economists expect that to translate into higher prices for consumers across the country and special pain for low-to-middle-income voters who make up much of Trump’s base — and are least able to absorb increased costs for consumer goods from air conditioners to clothing and furniture. Republicans are counting on getting Trump supporters to the polls in November to hold off projected Democratic gains in the House and potentially the Senate. Forcing consumers to pay higher prices could make that harder.
………
- Discussion
-
From angry bourbon makers in Tennessee to frustrated cherry farmers in Washington state, Trump's trade wars are making life miserable for GOP candidates in 2018. My latest. https://t.co/dagvfa2J4N
— Ben White (@morningmoneyben) September 24, 2018
I want you slack-jawed, swag-bellied Trump worshipers in your Chinese MAGA hats to remember that Trump's trade war belongs exclusively to him.
Not the Establishment.
Not the Democrats.
Not even the GOP.
It's all Trump. Every bit of it.
— Rick Wilson (@TheRickWilson) September 24, 2018
You must be logged in to reply to this topic.