SALT LAKE CITY (ABC4 News) – China is following through on its threat to retaliate after the United States increased tariffs on Chinese imports.
Monday, the country announced it’ll hike tariffs on $60 billion worth of U.S. goods effective June 1, 2019.
In response, the markets are plummeting. The Dow was down 700 points at one point, closing down 617 points.
And, that’s not the only downfall for consumers.
“Really you are going to see Americans and Utahns are going to be paying this tariff. A tariff is essentially a tax increase, and so what we will see is an increase in prices across the board,” said Robert Spendlove, Sr. Economist for Zions Bank.
He’s keeping a close eye on all the implications.
He says along with the consumer impact, Utah’s high tech, natural resources, and agricultural industries stand to lose.
He says in the short-term it could be painful.
“We could continue to see more drops as this trade war escalates, and it could get worse before it gets better,” he said.
But, he says taking a tough stand could resolve a long-standing problem our country has had with China.
“For decades China has been manipulating the U.S. Whether it’s through stealing intellectual property, manipulating their currency, essentially taking advantage of American companies,” Spendlove said.
He says both countries have a lot on the line. That’s why he believes it will be resolved.
One of the president’s top advisers says the negotiations will continue.
“There is a G20 meeting in Japan toward the end of June, next month. The chances that President Trump and President Xi will get together at that meeting are probably pretty good,” Larry Kudlow told FOX News Sunday.
Spendlove says as hard as it is to watch the markets tumble, when they are down it presents a buying opportunity for the long-term.