What Will the US-China Tariffs Cost You



Are you sick of hearing about the US-China trade war yet?  Have you already tuned out any talks that involve tariffs?

I almost did until I read something that stopped me in my tracks.  The trade war will disproportionately affect women.

What?  Aren’t we all buying goods from China?

According to traditional economic theory and empirical experiences of past trade wars, it is well documented that it is lose-lose for consumers.

Despite public figures claiming that trade wars can be won or that only one side suffers, that is simply not true.  Both sides of any war suffer and it’s usually those on the ground that suffers most.

In the case of trade wars, those on the ground are not soldiers but women and lower-income families.  Our society of consumers will on the whole pay more, but the brunt will be felt by those who can afford it least.

How Companies Deal with Tariffs

First, let’s look at how rational companies will deal with trade tariffs.  Included on the list of goods that fall under the 25% tariff and the newly proposed additional 10% tariff (on top of the 25%) are raw chemicals, elements and manufacturing components.

A lot of these components aren’t ones that we usually think would affect us, they are some gasket that goes on an engine part or some sealant on hardwood floors, or even a chemical compound in dishwashing detergent.

As a company, if you are making goods using these components, your costs just jumped by 35%.  If you are a manufacturer or a restauranteur, I’m hard-pressed to believe that profit margins are over 35%.

What are you to do?

You have one of 2 choices. You can either increase the price of your product or to source lower quality ingredients to compensate.  If it were me, I’d opt to do a combination of both.  I’d have to increase the price of goods so I don’t go bankrupt.  It’s doubtful that I can increase prices by 35% though, so I’d also have to source cheaper materials.

How Duties Affect Lower-Income Families

For most families, they may have to replace a windshield wiper or a coffee maker.  Those things now cost more and are made with cheaper parts.  We know that products made with inferior materials wear out faster.  So instead of that product lasting 2 years, it might now have to be replaced yearly.

For the more privileged in society, we can cut back on some of the discretionary items to fund the things we have to replace more often.  Fewer nights of take-out, postponing smartphone upgrades.

But for lower-income families, they don’t have as much of a buffer.  Each additional dollar spent is coming out of an existing budget.  Maybe it’s food.  Maybe it’s medicine.  Maybe it’s hydro.

As middle-income folks, knowing that inferior goods will need more replacing, we might be able to cough up a little bit more to buy a higher grade product.  Instead of buying something made in China, we might opt for something from Japan.  Instead of clothes from China, we might be able to splurge on European goods.

Lower-income families rarely have that privilege. They are the ones most likely to shop at the Dollar Store or General Dollar.  The major supplier for products sold in those stores is, of course, made in China.

Another Tax on Women

After looking at the list of products to be included under these tariffs, women will be disproportionately affected as well.  Items on this list include feminine hygiene products, clothing, components for handbags and handbags themselves, ingredients for cosmetics, shoes, infant formula, supplements and toys, to name a few.

Our western society has a tendency to market new fashion to women.  While it is true that we don’t have to succumb to this pressure, it is there none-the-less. As I went over before, women face unique challenges when it comes to money.

Even if women could refrain from buying clothing and makeup, it’s probably harder to avoid buying infant formula, supplements and toys.  Working mothers often do not have enough time to pump all the time. They might supplement their baby’s diet with formula.  Now that cost will increase.  While this will affect all families, again, it disproportionately affects single parents. And right or wrong, most single-parent families are women-led.

Personal X Professional Costs of Tariffs

On the list of levied goods are also food products. Frozen seafood and meat among them. What this means is that eating out is going to soon cost more.  When that happens, you and me, we go out less.  For a couple of weeks, most restaurants can still make it with fewer diners.

But over months, especially in winter, restaurant profits are lean.  They will need to start cutting back on shifts to save money.  Most service-based jobs such as waitstaff are again, predominately female.  So it’s possible that single mom who now has to pay more for tampons, infant formula, clothing and toys, now have less income.

Even for women in the trades, tools and tool parts are also impacted by the tariffs.  This affects men too, of course, but the point is that women will most likely have their work income impacted at the same time their personal consumption costs increase too.

Since women are just as likely to have to replace a car part or the car altogether as their male counterparts, it is to reason that women will be hit twice with tariffs.

What Does This Mean for Me?

A lot of the tariffs and policies are out of our control.  Best we can do is to mitigate its impact on our daily lives.  The reason the markets are panicking about a trade war and escalating tariffs is that we have created a world of consumers.

Our global economy is now dependent on shopping and buying things.  And not just any ol’ thing; it is fueled by buying cheaper things and more and more of it.

To combat this, we have to change our behaviour and our expectations.

I wish I could come up with a more insightful answer.  But for the past 3+ decades, we have conditioned ourselves to expect cheaper and cheaper goods.  Want a new-fangled TV? Wait a couple of years and the price will come way down. Want a new coat?  It’ll go on sale after the season (which is every month).

This was because retailers had been importing these goods at low costs and marking them down from MSRP for sales. Our expectation has been skewed. We have not been paying the true costs of goods for decades.

What’s more, we have been bringing future consumption to the present. Do I need enough graphic tees to last me the next 10 years? No, but I have them. And I have them now.

How to Shop

I’m going to be doing the following to mitigate the tariff’s impact on me as a woman.

First, I’m going to continue working on my capsule wardrobe.  I wrote about how I simplified my closet to be very mix-and-match so I don’t have odd pieces of clothing that need a soulmate.  That’s for my professional attire. Hence, I can postpone buying additional clothes for work. But I’m going to aim to do the same with my casual clothes too.

Next, I’m going to start buying more locally produced goods.  If I do need to replace a piece of clothing, I’m going to source them from a local producer. I can help support local businesses that may be having a harder time during the trade wars. I can vote with my dollars.

Finally, I’m going to live more sustainably.  Repair things before chucking them because unlike recently, replacing something in the future may no longer be cheaper than repairing them.  Also, this prolongs the product’s life cycle so I can again, postpone buying at higher prices.

Also, shopping more sustainably can help our local business’ preserve their margin.  For example, the disposable produce bags supplied by grocers are likely to increase in price.  The store provide them free to us, but they have to buy them at higher prices as part of their operating costs.  So by switching to reusable produce bags it is a win-win-win for the environment, the business’ livelihood and our budget.

Those are just some of the ways we can mitigate the impact of tariffs. I’m sure there are many more once we put our intention to finding more.

Please share any tips you have with our readers using the comments below!

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