The BRICS nations, comprising Brazil, Russia, India, China, and South Africa, have assumed importance as major partners in United States trade. The bloc has expanded its countries to include Iran, Egypt, Ethiopia, and the UAE among others that boost its economic heft. In the year 2023, the U.S. imported goods valued at approximately $578 billion from these nations. Some key products imported from the BRICS nations are discussed further herein. To learn about the origin of the BRICS coalition leaders may refer to this article, What are the BRICS countries, what is their origin, what currency do they have and when did they come into existence?
Top imports from BRICS countries
- Electronics: A lot of the imports are electronics, mainly from China. In 2023, the U.S. imported almost $427 billion in goods from China alone,
- Cell-phones and household goods at $66.7 billion
- Computers at $37.4 billion
- Toys and games at $32 billion
- Apparel and textiles: The U.S. depends a lot on the BRICS for clothes. In the year 2023, the imports were:
- Cotton apparel and household goods around $6.1 billion.
- Pharmaceuticals: India is a significant exporter of generic drugs to the U.S., and pharmaceutical preparations imports exceed $11 billion.Â
- Raw materials: The U.S. imports a large quantity of raw materials from BRICS countries, which includes:
- Crude oil: Around $6.3 billion
- Gem diamonds: Approximately $9 billion
These imports also reflect the variety of products entering the U.S. from BRICS countries and their significance in many sectors, including technology, healthcare, and consumer goods.
Effects of a 100% Tariff on BRICS imports
Recently, President-elect Donald Trump threatened BRICS nations, 100% tariff against all their products coming into our country in event of their continued endeavor to lessen their dependence upon the U.S. dollar for trade. If this is so, then American consumers are likely to be in for some real shock.
Potential price increase
Such heavy tariffs would lead to sharp increases in the prices of a number of consumable items. As various experts say:
- Electronics: The prices of laptops and tablets may shoot up as high as 46%, and that of smartphones by around 26%, because their production heavily relies on supplies from these countries.
- Apparel: Clothing prices are also likely to go up pretty significantly. Estimates are that tariffs may raise costs as much as 20%, hitting everyday items hard, such as jeans and shirts.
- Toys and household goods: Toys could become as expensive as 55% more, which, in seasons or times of holidays, might be costly to the family.
On the whole, American consumers could bear a burden as high as $90 billion extra each year due to price increase of everyday products that are imposed with tariffs of such kind.
Consumer’s economic impact
The economic implications of a 100% tariff are not limited to simple price increases; they could drastically affect how consumers behave and their overall spending power.
Spending power reduction
Research has shown that, in general, tariffs result in higher retail prices as importers pass on the costs to consumers. For example:
- A broad-based tariff increase could decrease the spending power of American consumers by about $46 billion to $78 billion annually, depending upon how retailers absorb pressures from tariffs.
- Basic commodities like electronics, clothes, and pharmaceuticals-in which the BRICS countries are important players-would see a price surge that may make consumers think twice about buying these products.
Consumer choice and market dynamics
The effects of a price increase on consumers would be to:
- Switch to cheaper alternatives or cut spending on non-essential items.
- Retailers might also have difficulty keeping sales volumes up when the consumer’s purchasing power has diminished, which could result in layoffs or reduced hours for employees in such industries.
The tariffs being threatened are not only a negotiating tool for trade practices but can also be seen as a crisis for American consumers, who already have to put up with inflationary pressures on other sides of their life.
Put differently, though the BRICS countries are exporters of highly value-added goods for American consumers, from consumer electronics to pharmaceuticals, a 100% tax would mean steep price hikes that could hit the bottom line in many households nationwide in the U.S.
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