CNBC Daily Open: U.S. consumers are starting to feel the pinch of Trump tariffs
U.S. consumers are increasingly feeling the economic consequences of President Donald Trump’s tariffs, with price hikes and potential supply shortages looming. Chinese e-tailer Temu, known for offering affordable products, has raised its prices significantly, citing “import charges” related to the tariffs. These fees, which can be as high as 145%, often exceed the cost of the items themselves, doubling the price of typical orders. This development is a clear sign of how tariffs are trickling down to affect everyday consumers, many of whom are already grappling with rising costs.
The effects of the tariffs could also lead to empty store shelves in the coming weeks. According to asset management firm Apollo, the U.S. may face supply chain disruptions as Chinese exports slow due to the trade restrictions. Although China exports far more to the U.S. than vice versa, U.S. consumers could ultimately bear the brunt of the trade imbalances. As Chinese-made goods become less available or more expensive, everyday goods that American families rely on could become increasingly scarce or unaffordable.
Meanwhile, global markets showed mild gains despite the ongoing tensions. The S&P 500 rose slightly by 0.06%, while the Nasdaq Composite saw a small dip. On the corporate front, major banks like HSBC and Deutsche Bank posted better-than-expected earnings, showcasing resilience in some sectors despite broader economic uncertainty. HSBC’s announcement of a $3 billion share buyback and Deutsche Bank’s highest quarterly profit in 14 years underscored positive outcomes for large European institutions.
The U.S.-China trade war remains unresolved, with recent statements from both sides signaling ongoing friction. While U.S. Treasury Secretary Scott Bessent urged China to de-escalate, China’s foreign ministry denied any current negotiations over a tariff deal. This continued standoff, coupled with rising import charges, could further strain U.S. consumers and lead to a prolonged period of economic instability. The upcoming earnings reports from major companies like Apple, Microsoft, and Meta will provide further insight into how tariffs are affecting corporate bottom lines and the broader market.
Source: CNBC