Sep 17, 2019 - Economy

The real-world impact of the trade war

Reproduced from NPR; Table: Axios Visuals

The impact of tariffs has been difficult to quantify because U.S. retailers that pay them can choose whether or not to pass the costs on to customers.

In an effort to show how one quintessentially American business is handling the issue, NPR tracked prices at a Georgia Walmart over the course of a year.

The big picture: "When it comes to the prices inside NPR's tariff-inspired shopping cart, the average price change since August 2018 was a 3% increase," write NPR's Alina Selyukh and Charlotte Norsworthy. "That's almost double the current rate of inflation."

Yes, but: Prices haven't moved uniformly in one direction.

  • Over the past year the price tags on some items included in the "NPR basket" — a mix of items from across the store drawn up after consulting the 2018 lists of tariffs the White House imposed on imports from China, Mexico and Canada — actually got smaller.
  • "The two most expensive Chinese-made items in NPR's basket got cheaper: a TV by 12% and a microwave by 17%. That's because TVs and other electronics have been getting cheaper for years," per NPR.

Why it matters: "Many makers and sellers have so far chosen to absorb most of the tariffs, spread them across dozens of items, or pressure suppliers to bear more of the burden. Big U.S. retailers — such as Walmart, Target and others — get the final say on the price tags, and for them, jolting shoppers with price hikes is the last resort," they write.

My thought bubble: The fact that average prices of the NPR basket have risen by about double the rate of inflation suggests the tariffs are playing a role in increased prices even at a retail behemoth like Walmart.

Go deeper: NPR shopping cart economics: How prices changed at a Walmart in 1 year

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