American industries, including apparel, technology and manufacturing, are set to lose big on account of the new tariffs on Chinese goods, according to Wells Fargo. The bank cited leather, computers, machinery and textile as among the most susceptible as the US and China continue to drag out bilateral trade negotiations.
Several industry organisations have already warned on how tariffs will impact their business, with retail giant Walmart warning that the extra costs would most likely be passed on to consumers. All of the industries cited by Wells Fargo rely significantly on imports and have a significant share of Chinese imports.
“American producers of import-competing goods could realise a bump in profits, at least in the near term, if tariffs push up their selling prices,” Wells Fargo’s analysts said in the report.
“However, any such boost likely would not fully offset losses among other firms due to higher input costs and slower economic growth,” they added.
US consumers can expect higher prices on goods in these industries as escalation in the trade war between Beijing and Washington has increased the tariff rate to 25% on around $200 billion U.S. imports from China. About 45% of goods produced in China are now subject to the 25% rate, up from the $50 billion tariff that was imposed last summer which affected about 8% of imports from China.