Letters

Last week, the Federal Reserve cut interest rates. Rates were at a 20-year high, and the cut was intended by the Fed, an independent body with no political ties, to help reduce inflation. It did its job. And more cuts may be coming before the end of the year.

Thanks, Fed governors — this is good news.

But, unfortunately, there’s bad news for the consumer (and inflation) that was reported just a few days ago: The White House is imposing additional tariffs on China. It’s a pretty clear pre-election move to show how this administration is being “tough on China.”

There will be new charges ranging from 7.5 to 100 percent on goods like electric cars, medical supplies, lithium batteries and solar panels, among thousands of products. And it’s not just a Democratic ploy — both parties are touting tariffs as a sure-fire way to show China who’s boss.

Except China couldn’t care less. The American consumer is the one who should be wringing their hands.

I was in the retail business for 40-plus years. I sourced products from China and other Asian countries largely because America either no longer made them or was not competitive in pricing. I dealt with quotas, tariffs, customs fees and the like throughout my career.

Tariffs only hurt the consumer. Here’s how and why:

Let’s say China makes a flat-screen TV and sells it to Costco for $100. They retail it for $199.

Now, the tariffs boost the cost to $150 (a 50 percent tariff). Does anyone think Costco will still sell it for only a $50 profit margin? Assuredly not! New price to you and me is $299.

Take a knit shirt as another example. Walmart is the world’s largest retailer, and they got there for a reason: They know their customer. Their customer wants a bargain and will not pay “department store prices.”

So Walmart buys from a manufacturer in China. Good quality, great price. Assume the cost is $3. You pay $4.99.

New price from China, with a 25 percent tariff: $3.75. Can the retailer keep the original price and still maintain their margin and profit goal? Sorry, no. New price to you, the customer, is now $5.99.

That tariff costs us money. It raises prices at just the time we are crying about inflationary pricing and seeing a glimmer of relief from the Fed.

The government estimates that the new tariffs will cost a middle class family (the precise group both parties are wooing for votes) $2,000 to $4,000 a year. Where is the wisdom in this decision? It sounds like a politically motivated decision aimed at looking tough. Both parties share in the deceit.

Only we, the consumer, get hurt.

Chris Fiore

North Haven