The trade showdown with China is about to take a different turn. The trade fight initiated by the president, Donald Trump, may affect American consumers and in the following days, the administration will reveal what Chinese imports will be taxed. Already there are import tariffs in effect. For example, you have solar panels and washing machines that were imposed a tariff back in January. President Trump levied steel and aluminum in March that includes $50 billion in other goods imported. In return, China responded to the US tax levy with its list of tariffs brought over from the United States.

These series of moves is unprecedented given the trade relation both countries have had for some time.

A Reuters study suggests what products should be levied

An analysis carried out by the Reuters agency shows a different narrative. In other words, for the tax to be imposed on the $100 billion worth of goods it has to target several product categories. The tax needs to be applicable to cell phones, computers, toys, clothing, and other consumer goods.

As confirmed by Vice President of International Trade for the Retail Industry Leaders Association (Hun Quach), consumer products cannot avoid the $100 billion tax.

This is because of the number of products imported and manufactured in China.

What this dispute over manufacturing and tariffs may do is shift the manufacturing of goods in China.

In other instances, some companies can absorb the costs they can afford to have and others may be forced to look elsewhere to manufacture their company products.

Company products affected by the tax hike

One company adjusting its prices for its products was LG Electronics. As reported by Reuters, the company's washing machines imported were slapped with a 20 percent increase in tax.

The change in price results in a $50 dollar increase for their machines. The change resulted in a four to eight percent increase. Here is the interesting aspect of the tariffs. As it turns out, the tariffs spared consumer electronics. But the reality of imposing tariffs could place the US in a difficult position since it manufactures and assembles products in China, along with other places.

When you examine US supply chains, they may be affected significantly. Furthermore, business would change since things like American semiconductors, software and other inputs to China for assembly before being imported to the US. On a related note, other allies in the region that include South Korea, Japan, and Taiwan supply lots of parts for smartphones.

Those parts specifically made for electronics could negatively impact companies like Apple and Walmart.

Shifts in trade between China and US

As the showdown intensified, China may be looking to invest in another trading block or region. To date, the European Union is Beijing's biggest trading partner. An Axios analysis confirms the byproduct of the trade between both regions is $1 billion in products and services a day. This shift in relations between China and The US is also due to the change in foreign policy and diplomacy. The election of Trump changed the role of how countries would be dealt with under this new direction.
© ALL RIGHTS RESERVED