Tariffs will push up prices and trip up impulse buyers

Liberation Day? Donald Trump declaring a trade war on the world is certainly liberating the American consumer from cheap consumer goods. His tariffs are a tax on Main Street, USA, as much as they are on his nation’s trading partners. Levies can be imposed overnight but onshoring manufacturing – the stated aim – is not so easy.

- JAMES MOORE

Some of the numbers, announced by a president playing the role of a dollar-store PT Barnum as he brandished a scorecard highlighting the perceived baddies, are mindboggling. The baseline charge is bad enough at 10 per cent. It includes the UK, Australia, Brazil, Turkey and Saudi Arabia among others, with steel facing 25 per cent and vehicles the same.

However, the EU faces double that. Japan will pay 24 per cent, Thailand 36 per cent, Vietnam 46 per cent and Cambodia 49 per cent. The charges imposed on Chinese goods rack up to 54 per cent including levies that have already been announced. The word “bazooka” has been used to describe what Trump has fired at global trade. In the case of China and the other countries at the upper end of the scale, that underplays the impact.

Needless to say, those at the upper end of the tariff scale are major players in the global garment trade, where minimal wages have facilitated the growth of fast fashion. It isn’t just the price of cheap clobber that is set to rise. The same production lines often churn out gear sold at much higher prices by fancy designer labels.

Their margins are such that they have the capacity to absorb some or all of the extra costs – whether they will or not is another question. It’s a different matter at the price points favoured by the likes of Shein, the flotation of which would be the biggest seen on the London Stock Exchange in years.