History Hints at How Trump's Tariffs Will Hurt Americans
The latest round would take $30 billion from households. Think back to some surges in gasoline prices for a sense of how that feels.
There's a familiar playbook for an oil shock.
Photographer: SeongJoon Cho/Bloomberg
One of the reasons investors are so alarmed about the escalating trade war between the U.S. and China is that there isn't an exact parallel in recent memory. It’s the fear of the unknown. But impending cost of the latest round, with tariffs expected to be felt in household budgets, does have a precedent – in the form of higher oil prices.
There are many times in recent history when oil prices have increased enough to create a similar pinch to what consumers are about to feel should this latest round of tariffs on Chinese imports go into effect. A 10% tariff on $300 billion of Chinese goods is a $30 billion tariff bill that American consumers will end up paying. The pocketbook effect is comparable1 to an increase of about 20 cents a gallon in gasoline prices -- definitely something consumers are going to notice, something that will pinch household budgets, but not an immediate cataclysmic shock either.