DENVER — Experts say President Dondald Trump’s pledge to move forward with tariffs on China could hit consumers in Colorado hard.
One week after the president declared “Liberation Day" in America, he suddenly announced he was pausing tariffs he planned to impose on most countries.
“It shows just how volatile the situation is,” said Keith Maskus, an emeritus professor of economics at the University of Colorado at Boulder.
He says the president’s pause appears to be in response to the market volatility over the past week.
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Trump limits tariffs on most nations for 90 days, except for Chinese imports
“The decline in the markets the last week or so, that's putting real pressure on the White House to try to reconsider what it's really doing here, whether this is a wise direction to go on trade policy,” said Maskus.
But the president says he’s increasing tariffs on the world’s second-largest economy after China announced it was increasing tariffs on the U.S.
“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” Trump said in a statement on Truth Social.
Economists say every Coloradan will want to watch the tit-for-tat between the U.S. and China closely because many of the products Americans use every day are made in China.
They say the prices for those goods would increase in a trade war between the two nations.
“We're talking about clothing, apparel, shoes, toys and electronics, especially electronics,” said Maskus. “I think for middle income consumers, that price increase, those price increases could be passed through fairly quickly, I would think, within a matter of months.”
Maskus says it’s also important to note that China is in a different position than it was a decade or two ago, and it may not be as willing to back down to Trump’s economic threats as it would have been then.
“They're developing their own supply chains. They have the kind of size and capacity to do that,” said Maskus. “They also have alternative markets that they'll be able to send their products to, including their own market, which is growing rapidly.”
The professor notes that companies, including automakers sourcing parts from China, may initially absorb higher costs.
"But even they can't do it forever," said Maskus. "So I think you'll likely see car prices rising within a matter of six or eight months."
For the average American consumer, it could all mean higher prices and more uncertainty in the months ahead.
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