Shoppers beware. That warning has come from economists ever since the trade war with China began last year. Eventually, they said, the fight between the two economic superpowers will hit regular Americans with higher prices at the cash register. The tariffs will bite.
Already some things are costing more. But the impact of the tariffs is uneven.
In August 2018, NPR began tracking how those tariffs might trickle down to shoppers at the world's largest retail store chain — Walmart. Since then, every few months we've checked prices of about 80 products at one Walmart in Liberty County, Ga., with tariffs in mind.
After one year, some prices in NPR's basket of goods have climbed significantly, at least in part because of the tariffs. The price of a dog leash has climbed 35%. A screwdriver costs 7% more.
But prices are complicated. They don't automatically rise with tariffs.
In fact, shoppers are only starting to feel tariffs. Last year, the Trump administration specifically targeted industrial materials and parts, rather than consumer products, to avoid shocking Americans with price hikes. The new rounds kicking in this month and in December will more directly affect a lot more of the things people buy every day, such as shoes, clothes and electronics.
To the White House, the goal of tariffs is to make Chinese imports more expensive so that American companies move production and jobs back to the U.S. But few companies have actually been able to do that; many stay put or switch to other foreign countries such as Vietnam.
Many makers and sellers have so far chosen to absorb most of the tariffs, spread them across dozens of items, or pressure suppliers to bear more of the burden. Big U.S. retailers — such as Walmart, Target and others — get the final say on the price tags, and for them, jolting shoppers with price hikes is the last resort.
When it comes to the prices inside NPR's tariff-inspired shopping cart, the average price change since August 2018 was a 3% increase. That's almost double the current rate of inflation.
It is important to note that some prices actually declined. The two most expensive Chinese-made items in NPR's basket got cheaper: a TV by 12% and a microwave by 17%. That's because TVs and other electronics have been getting cheaper for years.
Tariffs are only part the story. Prices go up and down for a variety of reasons. For example, Procter & Gamble last year raised prices on Charmin toilet paper and Bounty paper towels — noticeable in NPR's shopping cart — because of higher costs of transport and raw materials such as paper pulp.
The trade war's impact
To create NPR's basket, we consulted the lists from 2018 of tariffs the White House imposed on imports from China, but also Mexico and Canada — as well as China's retaliatory tariffs on U.S.-made products. The cart includes items from across the superstore, including groceries, home goods and stationery.
No company wanted to discuss specific products. But Jennifer Dolin, head of government affairs at Ledvance — maker of Sylvania lightbulbs in NPR's shopping cart — said tariffs are "one of several factors" that have contributed to price fluctuations on lighting products.
"A majority of lighting components and finished products that are sourced from China have been impacted by the recent tariffs levied by the U.S. government," Dolin said in a statement. "These tariffs affect almost every lighting company doing business in the United States, including Ledvance."
Toolmaker Stanley Black & Decker — whose screwdriver is in NPR's basket — warned last October that it would start raising prices this year to offset $200 million in new production costs caused by tariffs. A spokeswoman told NPR: "While we manufacture much in the U.S., we do have a global supply chain that we rely on with manufacturing across the globe."
NPR is also tracking the price of a colorful girls bicycle with training wheels, made by Kent International. CEO Arnold Kamler declined to address Walmart prices, but said his company has "found it necessary to increase our prices by a minimum of 15%" because of higher tariffs.
Not easy to shift manufacturing
Two of the price increases we saw in NPR's basket were in pet products: a dog leash and a dog collar. The industry has been hit by tariffs affecting fabric, metal and plastic — and many of the pet items are predominantly made in China, said Mike Bober, head of the Pet Industry Joint Advisory Council.
Like most other manufacturers — in shoe, auto and other industries — the makers of pet products have tried to absorb new costs, especially as the U.S. dollar has been strong against the Chinese yuan. But they can't do that in perpetuity, Bober said.
Plus, similar to companies that make furniture or children's goods, makers of pet care products are leery of abandoning their business with China — as President Trump has "ordered" companies to do — because of long-standing safety and quality standards they've developed at factories there.
"Really throughout the entire life cycle of pet care products everyone is feeling the pinch on this, and ultimately the people who are going to suffer the most are the pet owners," Bober said. "Prices are going to have to continue to go up."
Food and personal care prices
Food prices — another category with some major price jumps in NPR's basket — are some of the trickiest to analyze. They fluctuate a lot and get influenced by many factors besides tariffs.
For example, higher price tags on cod and cabbage had more to do with bad weather and low catch rates than the trade war, said Food Institute President Brian Todd.
On the other end of the spectrum, China's retaliatory tariffs against U.S. products helped drive down prices on pork and some seafood. China restricting imports from the U.S. left North American companies with a glut to sell domestically. "We lost an export market, so there's more here," Todd said.
At the same time, higher prices for garlic — they soared 53% — actually illustrate tariffs working as intended.
China had been the biggest exporter of garlic to the U.S., and domestic garlic growers have long argued they were being undercut by cheaper Chinese competition. Now that Chinese garlic faces higher tariffs, domestic companies can charge higher prices.
Walmart did not comment for the story, but in May, the company warned that "increased tariffs will lead to increased prices for our customers." Last month, Walmart Chief Financial Officer Brett Biggs said the company has been able to "thoughtfully manage pricing and margins."
"We spread the impact across hundreds of thousands of items we have in the market," Walmart U.S. CEO Greg Foran told reporters at the time.
Editor's note: Walmart is among NPR's financial supporters.
Ayesha Abid contributed to this report.
NOEL KING, HOST:
All right. Ever since the trade war between the U.S. and China started last year, economists have been warning that it is going to hit Americans in the wallet - that we're going to end up paying higher prices for some products. So did that end up happening? Since August 2018, NPR's Alina Selyukh has been tracking prices at a single Walmart in the state of Georgia, and she has this story.
ALINA SELYUKH, BYLINE: Left or right?
CHARLOTTE NORSWORTHY, BYLINE: Let's go right.
This was about a year ago. Producer Charlotte Norsworthy and I walked every aisle of a Walmart in Liberty County, Ga.
Now let's go find some lamps.
NORSWORTHY: Let's do it.
SELYUKH: Our goal was to track how the trade war with China might trickle down to shoppers at America's biggest retail store chain.
NORSWORTHY: Shoe laces.
SELYUKH: How much?
NORSWORTHY: Four dollars.
SELYUKH: Manila folder, Sharpie marker.
NORSWORTHY: Orange juice is right behind you.
SELYUKH: Scott toilet paper.
NORSWORTHY: That's going to be on aisle 23.
SELYUKH: We begin with the first tariffs the White House imposed last year on imports from China and some from Mexico and Canada. We started tracking prices of about 80 items at this Walmart.
I don't think I've ever spent this much time in a grocery store ever in my life.
NORSWORTHY: No - wait.
SELYUKH: Now it's a year later, and here's what we found. Some prices in our shopping cart climbed significantly, at least in part because of the tariffs. A set of two table lamps by Better Homes and Gardens now costs 10% more. Sylvania light bulbs, fresh garlic and a Stanley screwdriver are more expensive, too. We've also been tracking a girl's bicycle, chosen with the help of an expert.
How old are you?
UNIDENTIFIED CHILD: Six.
SELYUKH: Which of these bikes do you like the most?
UNIDENTIFIED CHILD: That one.
SELYUKH: This one?
UNIDENTIFIED CHILD: Mm-hmm.
SELYUKH: That bike, made by Kent, is now 6% more expensive. The makers of all these items did not comment on our specific products, but some of them confirmed that tariffs have pushed them to raise prices, though overall - and this is a big takeaway - the impact of tariffs proved uneven.
Many of the prices did not change; a few actually went down. For example, the two most expensive things we tracked - a Vizio TV and a Hamilton Beach microwave - they are made in China, but they got cheaper. That's because TVs and electronics get cheaper every year. Tariffs are only part of the story. Prices go up and down for lots of reasons - for example, costs of transportation and labor.
But overall, when we looked at the prices inside our tariff-inspired shopping cart, we found that, on average, the change we saw was an increase of more than 3%. That's almost double the current rate of inflation.
EMILY WANG: These things really are pretty complex, and it's very hard to forecast how the prices will change.
SELYUKH: Emily Wang is an economist at the University of Massachusetts Amherst.
WANG: Let's say the tariff is $1. It doesn't necessarily mean that if you are purchasing, let's say, a piece of clothing that was, like, $29, now you're going to have to pay 30. It's even possible that it remains $29 or even go below.
SELYUKH: That's because makers and sellers don't like raising prices. They want to get shoppers into stores, not scare them away. And retailers, like Walmart, are powerful. They get the final say on the prices that you see. And they're also big. They can spread the new costs around the whole store or absorb them and even pressure the brands and manufacturers to bear more of the burden. Every company that imports anything from China is now making this calculation. Take, for example, makers of pet products, like a dog leash in our NPR basket.
MIKE BOBER: They don't want to have to pass these costs along to pet owners. But unfortunately, it's becoming more and more necessary.
SELYUKH: Mike Bober is the head of the Pet Industry Joint Advisory Council. The plastic, fabric and metal that go into making pets crates, bowls and collars have been hit by new tariffs.
BOBER: What we're finding is that, really, throughout the entire lifecycle of pet care products, everyone is feeling the pinch on this. And ultimately, prices are going to have to continue to go up.
SELYUKH: In fact, shoppers are only starting to feel tariffs. In the first few waves, the Trump administration specifically targeted industrial materials and parts rather than consumer products to avoid shocking Americans with price hikes. To the White House, the goal of tariffs is to make Chinese imports more expensive so that American companies move production and jobs back to the U.S. But few companies have actually been able to do that. Many stay put or switch to other foreign countries.
JOEL PRAKKEN: And that's, of course, one of the problems with bilateral trade battles, is it's like whack-a-mole. You know? (Laughter).
SELYUKH: Joel Prakken is the chief U.S. economist at IHS market.
PRAKKEN: For example, China and Vietnam both fish in the same waters for the fish that we get from that part of the world, and so Vietnam trade with the U.S. is booming right now.
SELYUKH: This kind of reshuffling has been happening across many products, including clothes, pencils, furniture. In some cases, like with shoes, the vast majority have historically come from China. Now more tariffs are kicking in - this month, next month and in December. By the end of the year, almost everything imported from China - from apple juice to toys to laptops - will all have a new tax. And our shopping cart might get pricier.
Alina Selyukh, NPR News.
NORSWORTHY: Peanut butter and jelly.
SELYUKH: Wait. That's creamy. Do we want crunchy? Are we going to start that debate?
NORSWORTHY: Are you a crunchy peanut butter-eater?
NORSWORTHY: What? They're both 2.08.
KING: You can see all of the prices that Alina and her team tracked at npr.org/shoppingcart.
(SOUNDBITE OF CFCF'S "AQUASCAPE") Transcript provided by NPR, Copyright NPR.