Trade War has Ripple Effects on Consumers and Workers

Trade War has Ripple Effects on Consumers and Workers

Daytona Everett

President Donald Trump will put tariffs on Chinese goods early Friday, the first step in a trade war between the two countries.

“When people think it doesn’t affect them because it’s in L.A. or it’s in China or it’s happening somewhere else, well they don’t realize that it’s actually happening right in their backyard,” John Valdez, an economist in Palm Springs, said.

The Los Angeles and Long Beach ports generate about 40 percent of all U.S. imports, the majority of the imports being from China. The Los Angeles ports are the closest ports to China.

Tariffs are essentially taxes on goods for consumers which would affect people across America. As a result of higher taxes, that means Americans will see price hikes on everyday items.

“All of those goods, if they are taxed an additional 20 percent,” Valdez said. “That cost immediately goes onto the consumer and when the prices of those goods rises, people buy fewer things.”

The aftermath of less consumers creates a ripple effect, Valdez said.

“When they order fewer goods they’ll need less people to unload the boat, less people to deliver the goods to Walmart,” he said. “Less people to sell the goods, less people buying the goods.”

Valdez said the effects of this decision could be seen in the next few months, weeks and even days.

When looking at big shopping periods like the holiday season, the prices of TV’s, iPads and computers will have increasingly higher prices.

President Trump is imposing the tariffs to promote business within the U.S. and to sell more products abroad but there is still a negative effect on employment, With less movement in the shipping world, people like warehouse workers and truck drivers might end up losing their jobs, Valdez said.

On the other hand, stores with products made in the U.S. might see an increase in business and jobs, he said.

Despite the few advantages, Valdez disagrees with the tariffs as a whole because of their long-term effects. 

“When markets find the most efficient method to produce goods,” Valdez said. “It really benefits all people whether they’re Americans or Chinese or otherwise.”

Some changes are already in effect. Chinese companies are reselling U.S. soybeans, and Chinese companies are expected to cancel most of the remaining soybeans they have committed to buy from the U.S. in the year ending Aug. 31. This is when the extra tariffs take effect.