A mounting trade war between the U.S. and China could soon be hitting Americans’ wallets when it comes to several products.
Editor’s Note: On Friday, the Trump administration paused its new tariffs on electronics imported into the U.S.
It remains to be seen what President Donald Trump’s tariff policy will look like when all is said and done.
But, in the case of China, it will likely lead to higher prices in three key sectors: electronics, apparel and toys, according to Nada Sanders, distinguished professor of supply-chain management at Northeastern University.
That’s because even if the proposed tariff rate by China (125% on American goods) and the U.S. (145% on Chinese goods) is ultimately scrapped, ripple effects across supply chains are already in motion, Sanders says.
The mounting trade war between the U.S. and China could be hitting Americans’ wallets in a matter of weeks, Sanders says. Even after Trump’s announcement of a 90-day pause on all “reciprocal” tariffs, the proposed tariffs could still cost every American household up to $4,400 a year.
And uncertainty alone has rattled suppliers.
“It’s all really complicated at the moment because there are so many different kinds of tariffs — and there are so many numbers being floated,” Sanders says.
China is a leading exporter of electronics worldwide. By one estimate, the country exports roughly 63% of the world’s smartphones and 72% of computers.
“We’re looking at smartphones, gaming consoles, TVs,” Sanders says. “We could be looking at iPhones that are two or three times more expensive.”
Take, for example, the iPhone 16 Pro Max 256 GB, a device assembled in China. Its retail price of $1,199 could rise by $675 (56%), according to analysts from UBS Investment Research.
Another sector that could see higher prices is clothing.
China’s textile, garment and accessory exports totaled $301.1 billion, according to data from Chinese customs.
Fast-fashion retailers, such as Shein or Temu, may be able to exploit a trade loophole (the “de minimis” exemption in Section 321 of the Tariff Act of 1930) that would permit certain low-value goods to be shipped from duty-free. According to Reuters, over half of all packages with de minimis exemptions come from China.
To head off the fallout, Shein has moved to shift its supply chain out of China, opening an office in Seattle the company says will serve as its “hub for … U.S. fulfilment and logistics, as the [it] continues to localize and support speedier delivery times for American customers.”
“If they can move the goods into these bonded warehouses where the goods don’t officially enter the U.S., it gives them more certainty in terms of making these goods available and spreading those taxes out,” Sanders says.
Nearly 80% of the toys sold in the U.S. are sourced from China, according to The Toy Association.
Describing the situation as “untenable,” Greg Ahearn, president and CEO of The Toy Association, said the price of games, dolls, cars and other toys by the fall shopping season could see increases of 15% to 20%.
A company called Basic Fun! has already stopped ordering popular toys, such as Care Bears and Tonka Trucks, Sanders says.
“I can guarantee that, as we look toward Christmas, about 80% of the toys are going to be twice as expensive this Christmas compared to Christmas,” Sanders says. “I don’t think you’re going to be able to get items. You’re going to see massive shortages. It is just going to be a very expensive holiday season when it comes to toys.”