MARY REICHARD, HOST: Coming next on The World and Everything in It, the Monday Moneybeat.
NICK EICHER, HOST: Did you change your mind, Mr. President? Are they off?
AUDIO: No, they’re on. They’re on.
No, they’re on, he said, they’re on.
So what are they?
Here’s a hint: They will probably make more expensive to you everything from some smartwatches and televisions to some shoes, sporting goods, and meat and dairy products.
Further hint: When I say “some,” I mean all of the above products that are made in China and imported to the United States for purchase.
They are 15 percent tariffs on an estimated $112 billion worth of Chinese-made goods, and they started yesterday, September 1st. They are weapons of the trade war between the governments of the United States and China, a conflict now 13 months in duration.
The president emphasized two things before he set off on a holiday weekend: Number 1, that the tariffs are driving enough revenue to cover the costs of emergency aid to American farmers. They’ve needed that, because Beijing has been using its trade-war weapons too, hitting with tariffs of their own American agriculture and the products farmers export to China.
And Number 2, the president said that talks this month between Washington and Beijing are still on: talks aimed at finding a path to trade peace.
Prior to the punitive import taxes that took effect yesterday, U.S. tariffs had hit largely industrial goods — about $250 billion worth of those — and the impact wasn’t so noticeable to American consumers.
You’re more likely to notice these new tariffs. By which I mean you’re more likely to pay them, because they’re more likely to bid up the price of products made in China and sold here.
The next scheduled trade salvo is December 15th. That’s when the U.S. government levies higher tariffs on another $160 billion worth of Chinese products. If that should happen, then all but 1 percent of made-in-China consumer goods will fall under the trade-war tariffs.
REICHARD: The markets are closed today for Labor Day. On Friday, when they shut down, they closed the books on a rough August. But at least it closed on a positive note: all the major stock indexes finished up, and that broke a four-week losing streak.
Despite the good week, the month of August saw the Dow Jones Industrials and the Standard & Poor’s 500 indexes lose almost 2 percent of their value. The Nasdaq for the month was down closer to 3 percent. The smaller-company stock index, the Russell 2000, lost the most, more than 5 percent.
EICHER: It’s interesting that despite all the trade-war fallout and the turbulence in the markets, the underlying American economy remains pretty strong.
The bulk of the American economy consists of your day-to-day purchases and we don’t just buy Chinese stuff. We buy lots of things, and in July, we bought even more things — increasing our consumer spending six-tenths of a percent.
The Department of Commerce reported those numbers on Friday, and the report prompted some economic forecasters to make rosier predictions about economic growth in this 3rd quarter of the year.
Consumers do remain optimistic. The business research group, the Conference Board, reported that Americans’ assessment of the current state of the economy was the most positive it has been in nearly two decades.
And that is today’s Monday Moneybeat.