LUBBOCK, Texas (KCBD) - Last week we saw another tariff on $200 billion worth of Chinese goods. Rashid Al-hmoud, Ph.D, economics professor at Texas Tech University, said there is talk that there will be a tariff on another $300 billion of imported items.
“If that happens, as per their announcement, they are going to pass it on to the consumer and the consumer is going to end up paying more,” Al-Hmoud said.
This week, Macy’s and Walmart announced they will not be absorbing the price increase from the latest tariff, but will be adding it to the price of products. This comes after the U.S. announced an additional 25 percent tariff on Chinese goods earlier this week.
Al-Hmoud said consumers are going to start feeling the impact of this decision. Al-Hmoud used the example of a local furniture store that imports from China.
“They say $1,000 living set, if you will, is now $1,250,” Al-Hmoud said.
Al-Hmoud said the tariff is going to impact low and middle income families the most.
He said economists have studied where people spend the majority of their money. Low and middle income families spend it on goods, whereas high-income families spend it on services.
“There are some goods that you and I absolutely need, we have to have. If they are made overseas, obviously these products are going to impact our bottom line more than say a video game at Walmart,” Al-Hmoud said.
Al-Hmoud said the local businesses in our community are going to feel the impact, like when you have to pay more for that living room set..
“That’s money taken away from somewhere else, from going to a restaurant, or going to the movies,” Al-Hmoud said.
But, it’s not just impacting the local economy. Al-Hmoud said there is going to be a ripple effect on the regional and national level, too.
“It’s not just confined to the consumer paying 25 percent more. It’s going to impact a lot of other sectors that have absolutely nothing to do with imports, exports,” Al-Hmoud said.