Will tariffs on China affect your pocketbook?
"What we're doing with tariffs is a fantastic thing," said President Trump.
In his exclusive interview with KY3's Francis Watson during his visit to Springfield over the weekend, President Trump said he believes placing increased taxes on imported goods from China will ultimately help the US economy even though Americans might feel the effects in their pocketbook.
"We're starting to make our own product again," Trump said. "But I would rather them make it here, make it cost a little bit more, but have jobs."
"And that is a noble goal," said Dr. David Mitchell, an economics professor at Missouri State University. "I'm just not convinced that tariffs are the way to approach that."
Mitchell, the Director of the Bureau of Economic Research at MSU, describes himself as a conservative. But he says many observers think it would work just as well to remove the trade barriers around the world rather than add to them. And that the idea of job creation cuts both ways.
"I'll give you an example," he said. "The steel tariffs that George Bush put in place in 2003, economists know that had a cost to the economy of about $750,000 for every job that it saved. And you saw that in terms of the price of cars going up."
Walmart, which employs 1.5 million Americans, sent a letter to the Trump administration before the latest round of tariffs that now affects some $200 billion worth of Chinese products entering the U.S.
Walmart's letter stated "as the largest retailer in the United States and a major buyer of U.S. manufactured goods, we are very concerned about the impacts these tariffs would have on our business, our customers, our suppliers and the U.S. economy as a whole."
The letter explained that in Walmart's view the impact of the tariffs "will be to raise prices on consumers and tax American business and manufacturers."
"They're sitting here trying to decide should we raise prices, or do we go ahead and bite the bullet and have lower profits for a couple of quarters," Mitchell said. "They're trying to decide is this going to be a long-term thing, If it's going to be a long-term thing for the next three, four, five, six years going on out, they're going to have to go ahead and raise prices now."
The imports from China found at Walmart stores covers a wide-range of items. Handbags, backpacks, vacuum cleaners, bicycles, cooking grills, Christmas lights, shampoo, dog food, luggage, and air conditioners are among them.
And overall, the tariff's on China now cover all kinds of machinery, agricultural and livestock equipment, parts of TV and video units, plastics, and cars, trucks, and motorcycles just to name a few.
If you're surprised by the all-encompassing nature of foreign imports, don't be.
As Mitchell points out, "it's very rare for any one particular good to be made solely in the U.S. anymore."