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Donald Trump’s trade war will hit common US household goods from Monday when US steel tariffs begin to apply to washing machines, fridges and ovens, threatening to push up prices for American consumers.
The new tariffs are in addition to the Trump administration’s existing 50 per cent tariffs on imports of steel and some steel items, and will apply to the steel content of the goods, according to the commerce department.
The new tariffs will apply to imports of items including dishwashers, food waste disposal units, fridge freezers, tumble dryers and washing machines, as well as stoves and ovens.
Trump introduced tariffs of 25 per cent on steel and aluminium just weeks after returning to the White House, before doubling the levies to 50 per cent this month.
The metals tariffs are part of a broader suite of duties applied to specific sectors on national security grounds as Trump aims to boost US domestic manufacturing across several critical industries.
Imports of cars and car parts have been hit by tariffs of 25 per cent under the same national security authority. The administration has also launched national security probes — which could lead to tariffs — into trade on chips and chipmaking equipment, lumber, critical minerals and pharmaceuticals.
The expanded levies on household goods could drive up inflation in the coming months.
“The May CPI was a reminder that if it weren’t for the tariff episode, particularly in the United States, the Fed would be much more on their front foot right now and looking to cut rates now, not waiting,” said Robert Kaplan, a Goldman Sachs economist and former head of the Dallas Fed.
Daniel Hornung, an MIT academic who worked as an economist in the Biden administration, said the less than expected rise in inflation in May was “largely the result of slowing or price declines in areas that don’t have substantial near-term tariff exposure, like rent and airfares”.
He said stockpiling of inventories by importers ahead of tariffs going into effect might delay the impact on consumers. But major appliances that rely on goods such as steel that are subject to high tariffs, “are likely seeing initial tariff-related price increases that are only set to grow in the months ahead.”
An earlier 2018 tariff of up to 50 per cent on foreign-manufactured washing machines drove up consumer prices by an average of $86, or 12 per cent, per item, according to research by economists at the University of Chicago and the US Federal Reserve.
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The research also showed those tariffs, imposed by Trump in his first term, led to a similar rise in the price of clothes dryers, even though these were not subject to the levies.
The latest levies come into force less than three weeks before Trump’s so-called “reciprocal” tariffs on almost all US trading partners, which were unveiled on April 2 but later paused for 90 days, are scheduled to snap back into effect.
The threat of high US tariffs on almost all US trading partners unleashed intense market turbulence and a global stock market rout in April.
US trading partners have spent weeks trying to negotiate with Trump’s top trade officials and strike limited trade deals in exchange for lowering Trump’s threatened reciprocal tariff rate, which are country-specific and range from 10 per cent to 50 per cent.
In April, Trump excluded smartphones and other consumer electronic goods, including laptops and headphones, from his sweeping reciprocal tariffs in a sign that Washington would be willing to exclude some popular consumer goods from its trade war.
But US officials later said those goods would be considered as targets for tariffs under its national security probe into chips, which is ongoing.
