Holiday shoppers will notice a pricing gift this Black Friday and beyond due, in part, to President Donald Trump’s trade policies.
According to a Yahoo Finance report, the lower pricing on certain electronics isn’t because Trump’s tariffs have resulted in lower production costs, though. The actual reason that this year on Black Friday TVs and other devices are sharply discounted is that retailers placed larger than usual orders on goods imported from China to get better prices before the new rules went into effect. Now, retailers have engaged in pricing and discounting wars to help reduce their overstock.
Although some of the Chinese tariffs are already in effect, most of the current 10 percent additional taxes on imports from China is on industrial goods and manufacturing components, which consumers won’t necessarily notice during Black Friday bargain hunting. Trump purposefully left those types of products out of his initial trade policy to keep shoppers from feeling the pain of increased prices. However, on January 1, 2019, the president may issue a new policy with China and include the steep import taxes on everything that comes from China, and he plans to raise them from 10 percent to 25 percent. Such a move would certainly be noticed by consumers in the form of increased prices as they shop.
For now, U.S. retailers planned ahead, and the latest data shows that imports of televisions from China are up 37 percent. Plus, they imported 43 percent more laptops and 57 percent more refrigerators and freezers just in case the trade war between China and the U.S. heats up even more as 2019 arrives.
The new tariffs that President Trump put on $200 billion worth of Chinese goods Monday will hit home in a place that may not sit well with American consumers: their holiday gift-giving budgets. One way U.S. holiday shoppers can cope https://t.co/UnAhocbUtp pic.twitter.com/Y8jTfsk8fK
— Anthony Welch (@AnthonyWelchSr) October 21, 2018
Panjiva analyst Chris Rogers said, “We’ve had a significant ramp-up in imports from China. That would suggest lower pricing. The question is the timing—will it be lower pricing for Black Friday? Or lower pricing in the new year?”
Earlier this year, a report from Fortune called the new Trump tariffs a “war on Christmas gifts.” However, it looks like retailers planned enough so that holiday shoppers likely won’t feel a pinch on many purchases — at least this year. Of course, the overall cost of washing machines is up, even on domestically produced equipment, because of the increased tax. If a big purchase like that lands on a holiday shopping list, then expect to pay at least 16 percent more.
Shoppers who didn’t manage to stock up on their shopping before the tariffs hit, may get a reprieve from feeling the extra cost this year due to retailers overbuying ahead of the increase to ease the burden.