U.S. Commerce Secretary Wilbur Ross said that President Donald Trump's new China tariffs will increase prices but “nobody is going to actually notice.”
Ross told CNBC that the tariffs will be "spread across thousands and thousands of products" and "nobody is going to actually notice it at the end of the day."
China on Tuesday said it will retaliate with higher tariffs on $60 billion worth of U.S. goods after President Donald Trump announced new U.S. tariffs on $200 billion worth of Chinese imports.
Overall, the aluminum and steel tariffs could cost the U.S. beverage industry nearly $348 million, according to The Beer Institute.
Coca Cola has announced plans to raise prices, citing the cost of raw materials and packaging, though the impact on consumers is hard to gauge.
China’s Finance Ministry says it is going ahead with plans announced in August for increases of 10 percent and 5 percent on 5,207 types of U.S. goods.
The tit-for-tat measures are the latest escalation in an increasingly protracted trade dispute between the world’s two largest economies.
"If you have a 10 percent tariff on another $200 billion, that's $20 billion a year. That's a tiny, tiny, tiny fraction of 1 percent [of] inflation in the U.S.," Ross said.
Economists at Bank of America Merrill Lynch have warned that a full-fledged trade war, especially one that lasts more than a year, would slow the U.S. economy. By disrupting supply chains, eroding business confidence and heightening uncertainty, a trade war, they say, could “push the economy toward full-blown recession” and jeopardize America’s economic expansion — the second-longest on record.
Besides American soybean farmers, American manufacturers are also being squeezed. Machinery and components used in finished goods made in the United States have been affected. U.S. manufacturers are having to pay more for parts and equipment, thereby putting them at a competitive disadvantage to foreign rivals.
Material from Reuters and the Associated Press has been used in this report.
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