MINNEAPOLIS (WCCO) – China is striking back against U.S. tariffs, announcing its own tariff increase on $60 billion worth of U.S. goods imported to China. The trade war has sparked the worst drop in the stock market in months.
Target is down almost 4%, and Best Buy stock fell nearly 6%.
On Friday, the U.S. instituted 25% tariffs on $200 billion worth of goods. On Monday, the White House added the same tax on an additional $300 billion worth of goods, which virtually covers everything imported from China to America.
President Donald Trump blamed China Monday morning, tweeting they had a great deal and backed out.
Rosenthal Interiors has been run by the same Minneapolis family for 124 years. Fourth generation owner Rosie Rosenthal Lebewitz says the trade war with China is unsettling and costly. Still, customers are largely unaware.
“It’s too new and they don’t understand what it is affecting, but our price increases are just coming in and we’ll see a ton of them I bet this week,” Lebewitz said.
The latest tariffs will target Chinese-built couches, computers, food and drink dispensers, even light fixtures. Electronics, textiles and housewares will hit big box, but consumers will pay the price.
As China retaliates, U.S. exports of soybeans and wheat are hit hard.
“If it’s a trade war you want, you’ll find you’re the infantry and you’re the first ones up the hill,” Professor Ed Ussett said.
Ussett says it’s coming at a time the farm economy can least afford depressed prices.
“I don’t know how it’s going to end and that uncertainty is not good for this market,” Ussett said.
But with few Chinese goods in its store, Rosenthal’s customers should be spared the shock of higher prices.
“To us, we’ve always prided ourselves selling American-made quality furniture rather than recessing to lower-priced goods. Hopefully, that will bring us some business,” Lebewitz said.
It seems that instead of a trade deal that ends this dispute, both sides are digging in for a longer, more protracted fight with consumers, retailers, farmers and manufacturers caught square in the middle.