How the ‘Trump sales tax’ could send shipping rates up and hurt your wallet
US President Donald Trump’s plan to raise prices on consumer goods if he is elected back to the White House in November will send commodity prices higher and accelerate inflation, as happened during his 2017-21 term, transport and retail experts say.
Trump, who is running against Democratic Vice President Kamala Harris in the Nov. 5 election, has continued plans for a second term to impose tariffs ranging from 10% to 20% on nearly all imports and tariffs of 60% or more on goods from China. , in an effort to boost US manufacturing.
In their Tuesday debate, Harris called his proposal “Trump’s sales tax” that would hurt working families, and did not lay out his own tax plan. President Joe Biden has delayed implementing a proposed doubling of tariffs on Chinese electric vehicles to 100%, and a doubling of duties on semiconductors and solar cells to 50%. He also proposed new tariffs of 25% on lithium-ion batteries, steel and other goods.
“Trump’s import tariffs are ‘history repeating’ and will cause an increase in the ocean shipping market – where buyers will pick up the costs,” said Peter Sand, senior analyst at shipping pricing platform Xeneta.
The National Retail Federation, which represents Walmart and other companies that account for about half of box-shipping volume, is among industry groups opposed to Trump’s proposed tax.
“Tariffs are a tax on imports, acting as a sales tax in disguise,” the NRF said earlier this week, noting that it raises the cost of goods for consumers and hurts workers and businesses.
“We are the children who show that prices have not kept domestic production in place,” said Matt Priest, CEO of Footwear Distributors and Retailers of America, pointing out that 99% of shoes are now imported.
“We’ll be there talking to policymakers and discussing how prices are going to be paid by American consumers.”
The market rate of ocean shipping containers increased more than 70% after the Trump Administration announced new rates in 2018. The off-contract area standard is to move a 40-foot (12.19 meter) container on a busy trade route from China to the US West Coast. jumped 75% to $2,604 between Jan. 1 and Nov. 1 that year, said Xeneta.
The costs also hampered imports as shippers scrambled to find more cargo space on ships, trucks and trains, while cargo on land filled ports and warehouses, leading to higher prices for everything from furniture and shoes to metals.
Shipping rates have already increased due to ongoing attacks by the Iran-backed Houthis on ships along the Suez Canal trade route. That pressure, combined with a recent surge in holiday goods and recent industrial purchases has sent the cost of shipping a 40-foot container from Shanghai to New York to $10,000.
—Lisa Baertlein, Reuters
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