Reference News Network, August 4 report - According to the website of the New York Times in the United States, on August 2, US companies have begun to pass more tariff-related costs onto consumers.

In the early stages of the trade war initiated by President Trump, many companies chose to absorb the additional tax costs. However, there is evidence that, with deteriorating profit margins, they have been unable to maintain stable prices. This suggests that tariffs may have a more noticeable impact on prices in the coming months.

Government data, including data released by the Department of Commerce this week, show that prices for goods heavily affected by tariffs, such as home goods, toys, and appliances, rose in June.

In recent days—before President Trump announced tariffs on most of the world on Thursday evening—Adidas, Procter & Gamble, Stanley Black & Decker, and other large companies told investors that they had either already raised prices or planned to do so soon to offset tariff costs. Walmart, as well as toy manufacturers Hasbro and Mattel, have warned that tariffs will lead to price increases.

On July 25, the CFO of Carter, a children's clothing manufacturer, said during a call with analysts: "We are not interested in running a business with lower profit margins, especially due to tariffs (which result in low profits). If this leads to a permanent increase in our cost structure, we must find a way to compensate for it."

Since President Trump launched his trade policy earlier this spring, economists have been watching signs of price increases related to tariffs. However, inflation has remained relatively moderate, below expectations, prompting the White House to declare that "those who predicted tariffs would push up prices were wrong."

Economists have listed several reasons for this limited impact. Before the tariffs took effect, companies across the country competed to stockpile goods, giving them a significant buffer before having to import goods subject to higher tariffs. Many companies, both big and small, were reluctant to pass on higher costs to customers struggling with inflation before the tariffs finally took effect.

In certain industries, there is a lag between when companies buy goods from manufacturers and other importers and when those goods reach customers. Many products that have been on the shelves in recent months were loaded onto container ships before higher tariffs were imposed.

Although inflation has been relatively mild, prices are still rising, albeit at a gentle pace that most consumers find difficult to notice. Alberto Cavallo, an economist at Harvard University, said that since early March, the prices of imported goods have risen by about 3% on average, with goods from China seeing even larger increases.

Cavallo said, "The transmission at the retail level is often very slow." He and two co-authors of a paper analyzed the impact of tariffs on prices using data from several major U.S. retailers. He added, "That's why many people feel like nothing has happened."

On Thursday, Trump expanded his global trade war by announcing a series of new tariffs. If these tariffs go into effect as planned next Thursday, the double-digit tariffs that Trump has imposed on dozens of countries will definitely further pressure businesses, forcing them to pass some of the costs onto consumers.

Sara Haus, an economist at Wells Fargo, said that the next three to six months will be a "critical period" as more tariff rates take effect.

She said, "Companies are trying to come to terms with the fact that tariffs will continue to exist. As the certainty of a higher-tariff environment increases, they will be more willing and able to adjust prices. We are about to reach a point where you will start to see these costs passed on."

Trump and his advisors have insisted that foreign countries will bear these tariffs. However, according to U.S. Department of Labor import price data, so far, although there are some indications that exporters are absorbing additional costs, most of the costs have been passed on to U.S. importers.

It remains unclear how much tariffs will push up prices in the second half of the year. Whether the tariffs will have a one-time impact or a more lasting effect is also an unresolved issue.

However, economists generally believe that consumers will eventually feel the impact of the tariffs more deeply.

"Clearly, over time, the burden of these tariffs will fall mainly on Americans," said Harvard University economist Cavallo. (Translated by Wang Qun)

Original: https://www.toutiao.com/article/7534634655895683638/

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