(Bloomberg) -- The Trump administration slapped tariffs on roughly $110 billion in Chinese imports on Sunday, marking the latest escalation in a trade war that’s inflicting damage across the world economy.
The 15% duty hit consumer goods ranging from footwear and apparel to home textiles and certain technology products like the Apple (NASDAQ:AAPL) Watch. A separate batch of about $160 billion in Chinese goods -- including laptops and cellphones -- will be hit with 15% duties on Dec. 15. President Donald Trump delayed part of the levies to blunt the impact on holiday shopping. China retaliated.
While the Trump administration has dismissed concern about a protracted trade war, business groups are calling for a tariff truce and the resumption of negotiations between the world’s two-largest economies.
Face-to-face talks between Chinese and American trade negotiators scheduled for Washington in September are still happening “as of now,” Trump told reporters Friday before going to Camp David, the U.S. presidential retreat.
“We’re going to win the fight,” he said.
While Trump has repeatedly said China is paying for his tariffs, many companies and economists say that U.S. importers bear the cost -- and some of it is passed on to consumers.
The non-partisan Congressional Budget Office in August projected that by 2020, Trump’s tariffs and trade war will reduce the level of real U.S. GDP by about 0.3% and reduce average real household income by $580.
That followed a JPMorgan Chase (NYSE:JPM) & Co. note to clients estimating that the latest round of tariffs will increase the average cost per U.S. household to $1,000 a year -- up from $600 for duties enacted last year. That estimate is in the low range because it was based on a duty rate of 10%, before Trump increased it to 15%.
About 90% of California-based JLab Audio’s headphones and other wireless products targeted for duties got hit Sunday, possibly hurting holiday sales and forcing a delay in hiring, CEO Win Cramer said. About 40% of the company’s sales come in the fourth quarter, he said.
“If I had hair, I’d be pulling it out,” Cramer said. “I’m really concerned about the financial performance of the business, knowing that if we continue to eat this cost, how much it hurts.”
The tariffs are also harming the global economy. The International Monetary Fund in July further reduced its world growth outlook, already the lowest since the financial crisis, amid the uncertainty from the trade conflict.
China’s retaliation took effect as of 12:01 p.m. Sunday in Beijing, with higher tariffs being rolled out in stages on a total of about $75 billion of U.S. goods. Its target list strikes at the heart of Trump’s political support -- factories and farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing down.
Higher Chinese duties that took effect Sept. 1 include an extra 10% on American pork, beef, and chicken, and various other agricultural goods, while soybeans will get hit with an extra 5% tariff on top of the existing 25%. Starting in mid-December, American wheat, sorghum, and cotton will also get a further 10% tariff. While China imposed a new 5% levy on U.S. crude oil starting from September, there was no new tariff on liquefied natural gas.
The resumption of a suspended extra 25% duty on U.S. cars will resume Dec. 15, with another 10% on top for some vehicles. With existing general duties on autos taken into account, the total tariff charged on U.S.-made cars would be as high as 50%.
Gary Shapiro, president of the Consumer Technology Association, said the Trump administration’s approach of using tariffs to pressure China into a deal has backfired.
