Trump will impose tariffs on $150 billion in Chinese goods on September 1st followed by tariffs on another $150 billion in Chinese goods on December 15th and the total, according to J.P. Morgan, will cost American consumers about $1,000 per year.
Unlike Trump's previous tariffs which have been passed down to consumers through higher costs for goods and services -- totaling about $600 per year in higher costs -- Trump's next tariffs will hit consumers directly the world's largest bank says.
"What distinguishes China Phase III tariffs from preceding tariffs is the impact to Consumption and Capital goods whereas previous tariffs focused more on Intermediate goods," J.P. Morgan head of U.S. equity strategy Dubravko Lakos-Bujas said in a note to clients. "This suggests that the expected consumer impact should be larger in the latest round."
Lakos-Bujas said unlike the agriculture sector, which is receiving subsidies from the government to offset some of the tariffs, "there is no simple way to compensate consumer."
There is no simple way to compensate consumers, but I expect Republicans may try to in 2020.
I wouldn't be surprised if Trump and the GOP return to Washington after the holidays and call for more tax cuts or some other form of broad stimulus spending. It will be an election year, after all.
Their solution won't be to claw back the executive power Trump has abused to wage his trade war in the first place; their solution will be to throw more money at the problem.
Paying for all of this will be someone else's problem eventually, right?