Commonesses, the original minimum import tax of 10 percent (vs. 3.3 percent earlier) is actually a tax on importing intermediate products on the American consumer or manufacturer.
The high tax on the import of US $ 3.3 trillion can cost high tax of $ 660 billion, which can increase inflation in the US to produce an additional inflation capacity of two percent, which is more than four percent. This will put the American Federal Reserve into a strangeness of whether to give up the decrease in interest rates or will actively return to high interest rates and disrupt fresh investment.
Even a minimum of 6.7 percent additional import tax can severely compromise economics for exporting low -value products in the US (eg textile) where margin is thin for exporters.
Luxury goods- high-end automobiles, fashion ware, designer labels, where margin is high, can still survive. But the Trans-Clauntic or Trans-Pacific shopping trip is likely to be popular among Americans, such as Indians previously enjoyed shopping in America, like Dubai or Thailand or European people, “dirt cheap”.
