Five things to know about Trump's Labor Day weekend tariffs

The Trump administration is poised to impose 15 percent tariffs on roughly $112 billion of Chinese imports on Sunday, the latest escalation in a tit for tat trade war. The latest salvo comes amid growing fears of a global economic downturn and increasing pessimism about the prospects of striking a trade deal. 

Here are five things you should know about the newest round of tariffs:

The new tariffs will hit consumer goods, including some big holiday retail items.

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Until now, the Trump administration has tried to shield consumers from the effects of tariffs by focusing mostly on intermediate goods, which businesses buy to make their finished products. The upcoming round of tariffs cuts directly into consumer products, meaning people will start to see an increase in their bills.

Trump decided to postpone part of the tariffs until Dec. 15, allowing retailers to stock up on inventory ahead of the winter holidays, the biggest spending season of the year. But there are plenty of popular gift items on the list, such as shoes, winter clothes, sports equipment, some electronics and toys, and even Christmas ornaments.

Economists say the tariffs may not affect prices right away, as sellers sell off inventory and look for ways to keep prices from rising in the short term. But that will only last so long.

“I think it’ll take a little while. It could be months,” said Scott Eastman, a researcher at the Tax Foundation, a right-leaning think tank. “But in the medium term, we should expect to see these increased prices.”

Consumers may not notice the increases on individual items, but with the list of tariffed goods growing, it will eventually start eating into people’s disposable income.

“The total cost to consumers will be more than one particular item, and that means less income for consumers because they’re having to pay more for products,” Eastman added. 

The September tariffs will push the average tariff on Chinese products to 20 percent, according to an analysis by Chad P. Bown, a senior fellow at the Peterson Institute for International Economics (PIIE).

More tariffs are coming in October and December.

In case the newest tranche of tariffs weren’t enough, Trump has also scheduled two new rounds of tariffs for the coming months.

Trump has said that on Oct. 1, he would raise the tariff rate on $250 billion of Chinese imports from 25 percent to 30 percent. On Dec. 15, he will add a 15 percent tariff to the $160 billion of imports on consumer goods that were delayed for holiday shoppers.

If all those tariffs go into effect, nearly every product imported from China will face an import tax, with the notable exception of some chemicals and minerals. The average tax rate on Chinese imports will have risen from roughly 3.1 percent before Trump’s presidency to 24.3 percent, according to PIIE.

That could cost the economy $170 billion and shave 529,544 jobs off the economy, according to estimates from the Tax Foundation. 

An early estimate from J.P. Morgan estimated that the tariffs would cost each household $1,000. That was before Trump announced he would raise the tariffs by an additional 5 percent.

China has its own retaliatory tariffs coming into play.

With every volley of new tariffs from Trump, Beijing has retaliated with its own tariffs, hitting American companies that want to export to China.

On Sunday, China will impose tariffs of 5-10 percent on roughly $28.7 billion of American products. Another $45.5 billion are on the docket for Dec. 15, for a total of roughly $75 billion

In China's crosshairs are U.S. agricultural products, including soybeans, as well as oil and aircraft. Farmers, in particular, have suffered under the weight of the tariffs. China is also renewing its 25 percent tariffs on U.S. autos.

“Overall, China’s average tariff applied to U.S. exports will increase from its current level of 20.7 percent to 21.8 percent on September 1 and to 25.9 percent on December 15,” Bown said.

“This is a sharp increase from the 8.0 percent average tariff that faced US exporters to access the Chinese market before the trade war started in January 2018,” he continued.

Even more damaging to U.S. companies looking to export, Bown noted that China has also cut tariffs for U.S. competitors.

The trade war is expected to drag an already weakening economy.

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The economy is already seeing warning signs of a slowdown, and the trade war has only made things worse.

"We believe the risk of trade protectionism between the U.S. and China will persist for some time,” said Satyam Panday, a senior economist at S&P Global. 

The ratings firm is forecasting economic growth will drop to 2.5 percent this year and 1.8 percent next year. The August jousting over trade increased the risk of a recession in the next 12 months by 5 percentage points, though the overall odds still rest at around 1-in-3

Manufacturing has already seen two straight quarters of decline, meeting a widely accepted definition of a recession.

All eyes are on consumer spending, which accounts for more than two-thirds of the U.S. economy, and could be vulnerable to tariff-related price increases.

One measure of consumer sentiment fell 8.6 points in August, the largest decline in nearly eight years, largely due to the increased trade tensions. 

“While the overall level of sentiment is still consistent with modest gains in consumption during the year ahead, the data nonetheless increased the likelihood that consumers could be pushed off the tariff cliff in the months ahead," said Richard Curtin, the University of Michigan economist who directs the consumer sentiment surveys. 

That will pose a test for Trump, who is counting on a strong economy to bolster his 2020 reelection pitch.

Discontent over Trump's tariffs is growing in the GOP.

Trump’s protectionist trade agenda is an awkward fit in a Republican Party that has long supported free-trade deals, and GOP senators are growing increasingly frustrated with the blowback from the president’s tariffs.

While Republicans have been largely supportive of Trump’s efforts to take on China’s alleged unfair trade practices, some GOP lawmakers have expressed deep concerns with the president’s scattershot trade policy more than a year into his battle with China.

“There’s no question that trade uncertainty is contributing to the slowdown,” said Sen. Pat ToomeyPatrick (Pat) Joseph ToomeyNSA improperly collected US phone records in October, new documents show Overnight Defense: Pick for South Korean envoy splits with Trump on nuclear threat | McCain blasts move to suspend Korean military exercises | White House defends Trump salute of North Korean general WH backpedals on Trump's 'due process' remark on guns MORE (R-Pa.) to Politico. “We’re in a very good place. The danger is: Where are we going to be a year from now if concerns about trade continue to be an irritant to growth?”

Toomey, a top critic of Trump’s trade policies, is one of several GOP members of the Senate Finance Committee working toward a bill to curb the president's expansive tariff power. While Trump has ruled out signing a measure that would curb his trade authority, he’s reportedly open to a long-shot proposal from Sen. Rick Scott (R-Fla.) to cut taxes to cancel out the costs of tariffs.

Even so, Trump has stood defiant in the face of pressure to curb his trade battles.

"What does Pat Toomey want me to say? 'Let me put my hands up, China, continue to rip me off,’ ” Trump said in a Thursday interview with Fox News radio.

Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyWe've lost sight of the real scandal Grassley: Kavanaugh classmate didn't contact Senate panel State Dept sent explosive-detection dogs to Jordan despite evidence of mistreatment: report MORE (R-Iowa) has in the past used his committee to pressure Trump to back off certain tariffs and threats — and could potentially do so again.

“Tariffs cannot be the only negotiating tool,” he said after the last round of tariffs were announced.  “Tariffs are not a long-term solution."