According to UCLA economics professor Lee Ohanian, major retailers like Walmart are likely to increase prices due to the implementation of tariffs. Tariffs, essentially taxes on imported goods, can lead to higher costs for retailers, which are often passed on to consumers.
The Potential Consequences
- Higher Prices for Consumers: With tariffs increasing the cost of imported goods, retailers may raise prices to maintain profit margins. This could affect a wide range of products, from electronics to clothing.
- Trade Agreements: Ohanian believes the US will reach agreements with other countries to minimize potential tariff disruptions. He notes that “everybody loses in a tariff war, and other countries are relatively bigger losers from this than we are.”
US Imports and Trade Data
The US imported $433.3 billion worth of goods from China in the 12 months leading up to September, down from a peak of $538.5 billion in 2018, according to the US Census Bureau. This decline could be attributed to various factors, including trade tensions and tariffs.¹
Expert Insights
While Ohanian’s comments suggest that the US may have an advantage in trade negotiations, the outcome remains uncertain. The impact of tariffs on retail prices and the overall economy will depend on various factors, including the terms of trade agreements and the response of retailers and consumers.
What’s expected to happen ?
As trade policies continue to evolve, retailers and consumers will be closely watching the impact of tariffs on prices and the broader economy. The outcome of trade negotiations will likely shape the future of international trade and commerce.
