Trump’s tariffs mean a less merry Christmas in US

By Hu Weijia Source:Global Times Published: 2019/8/15 20:43:40

If China plays the card of the holiday economy to hit back on the US in the trade war, Americans may have an unforgettable Christmas this year with price hikes for Christmas trees, plastic reindeer, glittery wreaths and even Bibles.

US President Donald Trump said earlier this week that he is delaying some tariffs on Chinese imports because of the Christmas season, "just in case some of the tariffs would have an impact on US customers." Trump previously claimed that China is paying the full price of his tariffs, but now he has changed his mantra that the tariffs may have an impact on US consumers.

Some statistics show that two-thirds of the world's Christmas decorations are produced in Yiwu, East China's Zhejiang Province. In the US, some 90 percent of imported Christmas ornaments and lights come from China, the US media outlet reported, citing data from the US Census Bureau. 

Not only Christmas ornaments but also a wide range of made-in-China products hold a large market share in the US, so US consumers may have to endure higher prices thanks to Trump's tariffs, because countries outside China can hardly develop a production capacity that is large enough to meet the demand from the US market in the short run. That's why Trump pulled back from some pending tariffs ahead of the Christmas season.

The US is delaying tariffs on made-in-China items such as cellphones, laptop computers, video game consoles, and certain toys, footwear and clothing. 

This means the US market has rigid demand for those items and can tolerate price hikes. 

This can be a bargaining chip in China's trade negotiations with the US: Trump can delay tariffs on imports from China to curb inflation, so China can encourage its companies to raise the prices of certain products to push up inflation. 

Even if Chinese exporters raise their prices, US consumers cannot find alternative products in the short run. This may give an advantage to China during the upcoming holiday shopping season.

China won't be content to only play defense in the trade war. Trump's decision to delay tariffs reminds China that it can choose certain products on which to raise prices in the US market. 

Most US publishers print the Bible and some other religious texts in China. If the US-launched trade war results in a price hike or even a shortage of Bibles during the Christmas holiday, Americans will be deeply impressed by the interconnection between China and the US economy.

The author is a reporter with the Global Times.


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