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Next US tariff blow may be 10 times worse: Citigroup

03
Nov '18
The United States is reportedly preparing to announce tariffs on all remaining Chinese imports by early December, whose impact on US consumers may be as much as 10 times higher than earlier rounds of levies, according to a report from Citigroup economists. The additional tariffs may boost inflation even more than what is currently anticipated, it said.

Citigroup is a US multinational investment bank and financial services corporation headquartered in New York City.

“Amid tight labour markets and higher input costs, we think there is a risk that firms decide to pass through some of the costs to consumers,” US media quoted analysts Cesar Rojas, Catherine Mann and Veronica Clark as writing in the Citigroup Global Markets report released late last month.

The impact of a 10 per cent tariff on the $267 billion of Chinese imports could be 10 times larger than the first $50 billion round and double that of the $200 billion tariffs in the second round, the analysts wrote.

The new penalties, which could take effect in early February, would cover Chinese-made consumer goods like Apple iPhones and Nike shoes.

Apparel and footwear manufacturers and retailers are planning for the higher tariffs, according to Stephen Lamar, executive vice president of the American Apparel & Footwear Association (AAFA).

As companies mull over shifting to suppliers in other Asian countries, the law of supply and demand is putting upward pressure on costs in neighbouring countries like Vietnam and Cambodia, Lamar added. (DS)

Fibre2Fashion News Desk – India


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