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The purchasing power of American consumers may be significantly impacted by a rise in US taxes on Chinese imports. The most recent study by the National Retail Federation (NRF), titled "Estimated Impact of a Change in China's Tariff Status," indicates that if US tariffs were increased on common household goods like microwaves, T-shirts, toys, shoes, and more that are imported from China, consumers might lose $31 billion in purchasing power.
Toy prices would rise by 21%, or $93 per household, if China's PNTR status were to terminate, according to NRF estimates. Home appliances would rise by roughly 7%, footwear by roughly 5%, furniture by 4%, and apparel by roughly 2%. The average annual cost to American households of such a change might be $240. Given that they spend a greater percentage of their income and are more likely to experience price rises, low-income households are anticipated to be the most impacted.
Under the Partial Notice Regime (PNTR), China is subject to the same tariff rates as other trading partners of the United States. China's formal entry into the World Trade Organization in 2000 was made possible by Congress approving its PNTR status.
The study is released at a time when senators are debating whether to revoke or alter China's PNTR status in light of mounting criticism of US-China trade relations. China is granted the same tariff rates as other US trading partners under the PNTR status, which was established in 2000 when China joined the World Trade Organization.
"Despite significant efforts to diversify sourcing, China continues to play an important role in the supply chains of many retailers and other global industries, from raw material sourcing to production and manufacturing," stated Jonathan Gold, vice president of supply chain and customs policy at the NRF. "It is impossible for American families to escape the high costs of dramatic tariff increases on essentials such as clothing, footwear, furniture, appliances, and toys."
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