In case you missed it, the US has been fighting with other countries about trade policies for a while. The bargaining chip of choice: tariffs. That’s a special tax on foreign imports that makes them cost more. Think of it as a monetary punishment for countries that aren’t getting along. (The idea is that if a country’s exports cost more, consumers won’t buy as much. Then that country loses money.)
Who's been topping President Trump's sh*t list lately: China. The two countries have been on the rocks since March 2018. Trump's slapped tariffs on billions of dollars of Chinese imports. China's pres has retaliated. It hasn't been pretty.
Tensions simmered in late June, and a deal could be on the way. But in the meantime, tariffs on Chinese goods are still a 'go.' Here’s what that means for your wallet.
You may spend more on big-ticket and everyday items. Many companies eventually pass on their higher cost of goods to customers. Meaning you’re paying more, too. Things that are already more expensive because of existing tariffs: washers and dryers, home renos, and soda. Several big businesses — like Gap, Costco, and General Motors — have all said they’ll probably raise prices.
The stock market could get bumpy. Trade drama doesn’t usually sit well with investors. Last year, the Dow Jones (an index of 30 big US companies many people use to benchmark overall market performance) had some pretty rough days in response to trade news. So buckle up. On the bright side, the market’s recovered from every major drop in history. Then continued to go up. The Dow's actually up more than 15% so far in 2019. If you’re investing for the long term, stay cool and try to block out what happens in the short term.
theSkimm: One estimate says tariffs could cost the avg American family about $800 more per year. There’s not much you can do to control that...aside from comparison-shopping and adjusting your monthly budget to make up the difference. Not fun. But smart.