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Trump's newest China tariffs just kicked in — and JPMorgan says they could cost American shoppers an extra $1,000 a year

Business Insider logo Business Insider 9/2/2019 Theron Mohamed
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 The Trump administration slapped tariffs of 15% on $112 billion worth of Chinese goods including footwear, apparel, televisions, and video game consoles on Sunday. 

Shoppers are about to feel the pain. Americans could face $1,000 in extra costs a year thanks to the latest US tariffs on Chinese goods, JPMorgan says. The bank pegged the cost of the trade war to consumers at $600 a year without the new duties.

After the president's aides warned him further tariffs could "ruin Christmas," CNN reported, he pushed back duties on another $160 billion worth of Chinese imports such as cell phones and laptops until mid-December.

Together, the tariffs will "significantly" hurt the "wallet of the US/consumer voter ahead of the 2020 election," JPMorgan equity strategist Dubravko Lakos-Bujas and his team wrote in a report dated August 16. That claim is supported by a high-profile study earlier this year, which found the full effect of Trump's tariffs fell on consumers last year.

As a result, the tariffs have major implications for consumer spending - the largest component of US GDP - which has appeared fragile recently. While retail sales climbed 0.4% in July, consumer sentiment posted its sharpest monthly decline December 2012 in August, a University of Michigan survey found.

JPMorgan's $1,000 estimate might prove conservative, given it was based on a projected tariff rate of 10% and Trump has imposed a 15% duty.

Judging from the combative rhetoric from both sides, and their lack of progress in resolving the year-long dispute, the trade war's price tag for consumers could climb even higher.

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