Starting Friday, April 25th 2025, popular shopping apps, Shein and Temu, will be raising prices for US shoppers. This is in response to Trump’s harsh 145 percent tariffs that have been set against all Chinese imported goods. In response to this, China placed a 125 percent tariff on American imported goods setting the stage for a tariff war. While talks are currently underway between China and the US on meeting to discuss lowering tariffs nothing official has been announced yet. This is bad for many reasons because there are many low income individuals who rely on outlets like Shein and Temu as a cheaper alternative to many traditional big name stores such as Walmart and Target.
As of Friday, May 2nd, the tariffs have only been in effect for a week, and massive price hikes are already being observed. On Temu, a varsity jacket that was 20 dollars before the tariffs went into effect is now 30 dollars, a 50 percent increase. On Shein, the tariffs have been even more devastating, with a thick winter jacket going up from 17.54 to 30.69, a 175% increase. This is worrisome because if prices are already starting to increase by this big of a margin only a week into the tariffs being enacted. How much more will prices be raised a few months down the line? The last time in history tariffs on this scale were imposed was the Hawley-Smoot tariffs. The Hawley-Smoot tariffs were passed in 1930 with an eerily similar goal of protecting American businesses from foreign competition. This however, did not occur and European countries responded with tariffs of their own, causing a tariff war to start. This sank the US deeper into the depression and trade between the US fell by two-thirds during this period.
The most alarming part about this is that the Hawley-Smoot tariffs were only a 20 percent increase, while the tariffs President Trump imposed on China were 145 percent. This is seven times as much as the Hawley-Smoot tariffs and if not resolved soon could have devastating consequences. Global finance firm JP Morgan increased its predicted odds of a recession from 30 percent to a whopping 60 percent. This combined with the S&P 500 being down 3 percent since the start of the year is not a good indication of what’s to come. While too soon to predict anything, all anyone can hope for is that the two countries can come to an agreement, and tariffs will decrease.
