Trump's 15% tariffs on $112 bn in Chinese products take effect

Washington DC: The Trump administration's latest round of tariffs on Chinese imports took effect early Sunday, potentially raising prices Americans pay for some clothes, shoes, sporting goods and other consumer goods in advance of the holiday shopping season.

The 15 per cent taxes apply to about $112 billion of Chinese imports. All told, more than two-thirds of the consumer goods the United States imports from China now face higher taxes. The administration had largely avoided hitting consumer items in its earlier rounds of tariff hikes.

But with prices of many retail goods now likely to rise, the administration's move threatens the US economy's main driver: Consumer spending. As businesses pull back on investment spending and exports slow in the face of weak global growth, American shoppers have been a key bright spot for the economy.

As a result of Trump's higher tariffs, many US companies have warned that they will be forced to pass on to their customers the higher prices they will pay on Chinese imports. Some businesses, though, may decide in the end to absorb the higher costs rather than raise prices for their customers.

After Sunday's tariff hike, 87 per cent of textiles and clothing from China and 52 per cent of shoes will be subject to import taxes.

On December 15, the administration is scheduled to impose a second round of 15 per cent tariffs this time on roughly $160 billion of imports. If those duties take effect, virtually all goods imported from China will be covered. The Trump administration has been locked in a trade war with China for more than a year.