In Trump’s world, every step you take could cost more | McClatchy Washington Bureau

Marina Carpenter had just purchased Chinese-made shoes at a Payless ShoeSource in this city northeast of Atlanta when she pondered what would happen if the coming presidential election led to a a double-digit price increase.

Like many Americans, she doesn’t have lots of extra income and said she’d be forced to cut back if shoes and other imported goods suddenly cost 15 percent more.

“I’m sure everybody would have to cut back,” she said.

Call it the Trump effect.

He’s promising to slap steep trade penalties on goods made in China and Mexico , a move he says would force manufacturers to move factories back to the United States, create a lot of jobs and help middle-class Americans.

However, hitting two of the the country’s largest trading partners with higher import taxes called tariffs could backfire and instead hit ordinary Americans in the wallet. And if you want to see how, look down at your feet.

Trump suggests tariffs of 45 percent on any products imported from China and 35 percent on goods from Mexico. If a shoe made in China is imported at a cost of $5, for example, the wholesale price would now be $7.25.

“Forty-five percent would be catastrophic for our industry,” said Matthew Priest, president of the Footwear Distributors and Retailers of America. “Have he and his advisers thought through the impact these things would have on the fabric of our society? It’s not shooting yourself in the foot. It’s blowing a hole in your abdomen.”

American businesses imported about 2.4 billion pairs of shoes last year, almost 7.7 pairs for every man, woman and child in America. It’s why even small tinkering with the cost of products could erode consumers’ spending power.

“An increase in tariffs on countries like China and Mexico would have some immediate price effects,” warned Caroline Freund, a senior fellow at the Peterson Institute for International Economics, a pro-trade nonpartisan research group.

Since about 35 percent of everything the U.S. imported last year came from those two countries, costs to consumers would multiply as they flowed through to many products well beyond shoes.

How much? The overall price of imported goods could rise by about 15 percent, according to calculations by Mark Zandi, chief economist for Moody’s Analytics.

In an interview, he said that would be disastrous.

“If business doesn’t pass through the cost, it comes out of profitability. This affects stock prices, which affects household wealth. . . . It’s not just the higher (consumer) prices,” said Zandi, who was an adviser to former GOP presidential hopeful Sen. John McCain of Arizona. “You’re not going to invest as much. You’re not going to hire as much.”

At the same time, Trump’s goal of forcing manufacturers to return to the United States is already happening in the shoe business. But that’s not necessarily creating a lot of jobs.

German shoe company Adidas, for example, said in August that it would create a futuristic plant outside Atlanta with industrial robots that would eventually make upward of 500,000 pairs of shoes annually. Adidas will get a modest per-hire tax credit of $3,500.

It expects to employ just 160 workers.

Similarly, Under Armor makes specialty fabrics abroad but has a quick-turn specialty facility in Glen Burnie, Maryland, that serves high-profile athletes. That local manufacturing, a fraction of its global production, still stitches together product brought in from Asia and the Americas.

Neither venture is bringing back the old-style plant that employed an entire community.

Also, Trump’s promise assumes that manufacturers forced out of China or Mexico would build factories in the U.S. as the only alternative.

Walking out of the Payless ShoeSource store, Carlos Flores doubted shoe companies would roll over and pay the higher costs.

“Everything depends on how much money you want to pay, but business needs money to run. So they have to look at from where they’re buying,” he said, predicting shoe companies would source from other cheap-labor countries.

What’s more, Mexico and China would likely respond in kind.

“What kind of retaliatory response happens? Where do things go from there?” asked Michael Strain, director of economic policy for the American Enterprise Institute, a conservative free-markets think tank. “We can be confident that the outcome will be bad.”

Once down the path of tit-for-tat, anything can happen.

“If we start putting tariffs on imports coming into the United States, we are going to see a raft of trading partners doing the same,” warned Linda Dempsey, vice president of international economic affairs for the National Association of Manufacturers, which does not endorse candidates.

Penalizing Chinese products is risky. More imports come from there than anywhere else, and it’s the third biggest market for U.S. products, after Canada and Mexico.

The benefit? Lower prices paid by ordinary Americans at Wal-Mart, Best Buy and other retail outlets – including Payless ShoeSource.

And if you like that inexpensive big-screen TV, think Mexico.

The price and quality of a television has fallen by almost 81 percent since 2008 when measured by the Consumer Price Index, which measures the price of a product and what a consumer gets out of that product. TVs, in relative terms, are cheaper, given their much larger size and rapid technological improvements in a variety of functions.

Much of global television manufacturing has relocated from Asia over the past 15 years to a corridor around Tijuana, Mexico, and the sector relies heavily on automated factories, not cheap labor. It means the prospect of labor-intensive manufacturing returning to the United States is tenuous.

“There probably would be some businesses who this would help, I guess. We shouldn’t completely forswear that possibility,” said Strain, from AEI, the conservative think tank. “But the overall effect of this (tariff proposal) is significantly negative for the U.S. economy.”