Purchasing Decisions During the Trade War

The trade war between China and the United States has continued for longer than one year, and there appears to be no end in sight. Earlier last week, President Trump and President Xi Jinping had talks collapse while a potential deal was on the table. President Xi Jinping is not looking to resume talks with the United States until this nation apologizes for past actions. With President Trump at the helm, this scenario does not appear likely at this point. However, while these countries continue to dispute tariffs and other trade agreements, consumers continue to suffer. Financial professionals, such as Don Gayhardt have been watching talks between these two nations closer. President Trump has remained stern with his approach and dealings with China. However, his intention to harm China appears to be damaging the American consumer the most. As the middle of the year approaches, business analysts are beginning to provide purchasing guidance for consumers moving forward due to tariff increases.

Rising Household Costs

With President Trump imposing an additional 25% tariff on $200 billion of Chinese imports, the American household is projected to lose hundreds of dollars over this next year. Rising household costs should come as no surprise, seeing as how many goods enjoyed in the United States are manufactured in China and imported back to the United States. Since the United States has outsourced so many positions to this nation, there is no way for the American consumer to escape this impact. There is also the possibility of China retaliating and imposing more tariffs on United States goods. This scenario could prove to be even more costly for Americans as this trade war continues to heat up.

Almost half of the American households are unequipped to handle an unexpected expense of $400. As the majority of this nation does not pay close attention to markets daily, the impact will be felt gradually throughout the year. The cost of living continues to increase around the world, and this does not seem to be slowing down. Citizens around the world are experiencing an exciting point in history and will be remembered long after President Trump’s tenure. Analysts have pinpointed essential items that should be purchased relatively soon before increasing tariffs impact them.

Purchasing Big Ticket Items Now

The cost of food has continued to rise aside from tariff increases and will only continue to do so as a result. Outside of canned goods and processed food, consumers will have to keep purchasing these items as needed. However, big-ticket items such as smartphones and televisions should be purchased relatively soon before price increases take effect. The technology sector is currently driving the most significant movement for the stock market, and trade disputes will affect these items the most. If you are in the market for one of these items, waiting until Black Friday to make a purchase could be the wrong decision this year due to tariffs. Of course, purchasing items needed around the household usually takes precedence over luxury goods.