2025-0518 [CNN]: Trump lowered tariffs on China. Here’s why that won’t spare Americans from price hikes and shortages
CNN interviewed Professor Tsay about how the current import tariffs and the uncertainty surrounding them could impact American consumers.
https://www.cnn.com/2025/05/18/economy/china-tariffs-prices
From the article:
But it’s not only prices that consumers should be concerned about, said Andy Tsay, a business and analytics professor at the Leavey School of Business at Santa Clara University.
“Any cost and risk added to the supply chain has to be expressed somehow, not necessarily through an increase in the end price, but possibly in less conspicuous ways,” he said. For instance, more goods could go out of stock given the challenges and costs businesses are encountering with importing more goods from China.
Another consideration: “It might be that items go on sale less frequently and with smaller discounts.”
There’s also the possibility that new products don’t make it to market altogether.
In addition, the back and forth could mean that US consumers are stuck with higher prices as a result of President Donald Trump’s tariffs, even if he eventually modifies the rate.
“If businesses learn from this forced experiment that they had been underestimating customer willingness to pay for an item, prices are unlikely to come all the way back down even if the tariffs go away,” Tsay said.