Christmas in August: What you should buy now as trade tensions heat up

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Christmas in August: What you should buy now as trade tensions heat up

August 9, 2019

by Jessica Dickler - CNBC

 

Excerpt: It’s time to shop — not only for back to school, but for Christmas.

President Donald Trump’s latest threat to slap elevated tariffs on a widening selection of Chinese products could mean American shoppers will face higher prices throughout the fall and into the holidays.

Tariffs on goods traded between the U.S. and China have already increased in several stages since early 2018. Now, Trump has announced another round of tariffs on the roughly $300 billion of Chinese goods that had not already been targeted by American levies. The charge will take effect from Sept. 1.

That is in addition to the 25% tariff Trump imposed in May (up from his original proposal of 10%) on another $200 billion worth of Chinese imports.

The president has said that China will bear the brunt of the costs from the tariffs, yet experts say the burden will land squarely on U.S. consumers. (Exactly how those higher prices are passed on depends on a number of factors, including whether suppliers absorb the additional cost, source production in another country or increase prices.)

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To get ahead of the next waves of tariffs, Russ recommends buying some items now, if possible — such as cellphones or laptop computers — rather than holding off until later in the year. Even Christmas lights and decorations, which are mostly imported from China, will be costlier ahead of the holiday season.

“It’s just getting more expensive,” added Michael Bonebright, a senior blog editor at comparison shopping site DealNews.

For example, “I would immediately buy a smartphone rather than wait until Black Friday,” he said. (The price for an iPhone XS would rise to $1,142, up from $1,000, with a 25% tariff on China imports, J.P. Morgan said in a note to clients, although another top analyst predicted Apple will absorb most of the additional costs and keep prices unchanged.)

Bonebright also recommends stocking up on whatever is on sale now, from frozen food to footwear. “Shop as far ahead of time as possible.”

And further, scale back, he advised. “We are not in a recession, but if we start shopping like we are, we will be less effected.”

As for buying holiday presents this year, “look to give gifts that are intangible,” Bonebright said.

 

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