Tariffs on Chinese Imports to Affect U.S. Consumers by Late May, Analyst Says

The recent imposition of tariffs on Chinese imports is set to impact American consumers and the broader U.S. economy starting in late May, according to Gary Cohn, former chief economic advisor to President Donald Trump. The typical supply chain cycle, encompassing production in China and distribution in the U.S., averages about eight weeks, marking the timeframe when increased costs will begin affecting retail prices. This timeline aligns with tariffs that took effect on April 2, signaling that price adjustments at the cash register are imminent.

Early consumer behavior has already indicated anticipation of these changes, with a notable surge in purchases of high-value goods such as automobiles, washing machines, and electronics. These front-loaded purchases aim to avoid the added costs from tariffs, resulting in near-record vehicle sales during this period. Despite these short-term sales boosts, consumer confidence metrics are beginning to decline, with several prominent brands reporting weaker sales projections for the upcoming quarter.

Small businesses face pronounced challenges amid these tariffs, especially sectors reliant on imported goods with steep duty increases, such as toy retailers encountering tariffs exceeding 140%. The increased costs and supply disruptions prompt many small enterprises to scale back inventory orders or consider business closures. Industry experts and logistics professionals have raised alarms about ongoing supply-chain pressures, forecasting potential rises in domestic unemployment and financial market volatility linked to disrupted trade flows.

Compounding these challenges is a significant drop in maritime container bookings from China to the U.S., which decreased by over 60%, affecting the movement of goods and contributing to supply-chain bottlenecks. Additionally, the regressive nature of tariffs means that lower-income households, which allocate a larger proportion of spending to essential goods, will bear disproportionate impacts from rising prices.

While there have been proposals for tax relief measures targeting middle and lower-income households to mitigate the burden of tariffs, economic advisors express skepticism about the feasibility of implementing such measures in the near term. With no active trade negotiations between the U.S. and China underway, the economic effects associated with tariffs are projected to intensify, underscoring ongoing uncertainty in market stability and consumer spending patterns.