DENVER -- Get ready to pay more for washing machines.
The Trump administration is adding a tax on all foreign-made washing machines.
The tax starts at 20 percent for the first 1.2 million washers imported this year, then goes up to 50 percent for every other washer imported after that.
“Started it in my garage and this is our third warehouse now,” said Cody Hinsz, owner of Denver Washer Dryer.
Hinsz has owned Denver Washer Dryer for five years. He refurbishes damaged appliances he buys directly from the big-box stores and sells them for a lower price.
He said a third of his inventory is made up of foreign-made washers such as Samsung and LG. He is worried as his suppliers increase their costs, he’ll have to keep up.
“All the stuff that is going to be refurbished, they’re going to be charging more for it at the same time. And so we’re going to have to pay more for our inventory at the get-go and we might have to make up the cost,” Hinsz said.
And that means a price-hike for customers.
“I think consumers are the final looser in all of this process. We are the ones who pay higher prices, we are the ones who get inefficient productions,” Kishore Kulkarni said.
Kulkarni, professor of economics at Metropolitan State University of Denver, said the tariff could turn the largest U.S. manufacturer of washing machines, Whirlpool, into a monopoly.
It could increase prices now that it faces less foreign competition. He also said quality might suffer.
“I think it’s a very wrong-headed decision with not much economic thinking behind it. I think there is no reason to improve the quality because now they are protected from outside competition,” Kulkarni said.
Kulkarni is worried about the larger implications the tariff might have on the United States.
“In all my 45 years of either learning or teaching economics has taught us this is a very wrong policy. Countries that have become more protectionist have always lost economic welfare. Countries that have opened up trade for outsiders have always gained,” Kulkarni said.
For Hinsz, he remains hopeful the tariff won’t be significant enough to force him to close his doors.
“I see what they’re trying to do is bring jobs back to U.S. soil for sure, but it’s going to be at the expense of the consumer,” Hinsz.
So how much of an increase will there be?
Kulkarni said it’s too soon to tell, but consumers should be ready for prices to go up 15 percent to 20 percent. LG announced it will start raising prices next month.