Posthaste: How are those tariffs working out for you so far, Mr. Trump?

U.S. President Donald Trump delivers a speech marking his 100th day in office in Warren, Michigan, on April 29. Photo by JIM WATSON/AFP via Getty Images

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From the 90-day backtrack on reciprocal tariffs to the “unsustainable” trade war with China, signs are growing that the U.S. President’s trade tactics may not be working out exactly as planned.

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Since Donald Trump took office just over 100 days ago, the S&P 500 has fallen more than 8 per cent, U.S. consumer confidence has plunged to an almost five-year low and recession odds are rising.

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Yesterday the president barely repelled a challenge to his global tariff offensive in the Republican-controlled U.S. Senate and polls show a majority of Americans are against them, Bloomberg reports.

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Jimmy Jean, chief economist of Desjardins Group, in a recent note took a look at some of the ways the trade war with China and “Trump’s tariff house of cards is already falling apart.”

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Inflation

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Front and centre, the test for tariffs in the American people’s eyes will be rising prices.

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China, America’s third-biggest trading partner and second biggest source of imported goods, now faces a 145 per cent tariff from the United States. It has responded with a 125 per cent tariff on American goods.

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As the largest source of foreign content for U.S. personal consumption, tariffs on China will erode real disposable income and the purchasing power of American households, especially lower-income households, said Jean.

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The Tax Foundation estimates that the duties on Chinese goods — even accounting for Trump’s exemptions on electronics — will cost households US$1,200 a year.

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And prices are already rising.

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E-commerce shopping sites like Shein Group Ltd and Temu face a 120 per cent tariff on many of their products due to the U.S. government’s decision to end the “de minimus” exemption for small packages from China.

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According to a survey by Bloomberg, prices on these sites have jumped from 51 per cent to 377 per cent on some items. On Temu’s shipped-from-China goods, taxes exceeded the value of the product. A US$19.49 power strip, for example, attracted US$27.56 in import charges.

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Machinery, construction materials and industrial equipment will also become more expensive, said Jean, threatening businesses’ capital spending plans and corporate margins.

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Supply chain disruptions

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China is not only a major exporter of finished goods, but a “critical supplier” of parts and raw materials, said Jean. Roofing membranes, for example, are made in a small number of Chinese factories and during the pandemic lockdowns, disruption in these supplies led to delays and cost overruns in North American construction projects.

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“In the context of what now resembles a quasi-embargo on Chinese imports, many more such stress points are likely to emerge,” he said.