Trump China Tariffs: Retail Gets Another Blow in Trade War

https://www.bloomberg.com/news/articles/2019-08-23/retailers-get-another-blow-as-trump-ratchets-up-china-tariffs?utm_source=google&utm_medium=bd&cmpId=google

Inside A Costco Wholesale Location Ahead Of Earnings Figures

Photographer: Luke Sharrett/Bloomberg

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For American retailers, what Trump giveth, Trump taketh away.

President Donald Trump’s administration, which
said just
10 days ago it would delay until December some of its new tariffs on Chinese goods, has hit the retail sector with a new blow: The
new levies
will be raised to 15% from 10% as retaliation after China threatened to impose additional tariffs on $75 billion of American goods.

He
also said
that the $250 billion of goods and products already being taxed at 25% will see that rate hiked to 30% starting on Oct. 1.

Trump had warned earlier in the day that he was planning to escalate the trade war with China, firing off on Twitter a new demand that U.S. companies seek alternatives to producing goods in China. Some large retailers had said they’ll be able to pull levers to keep from passing on the costs to consumers at the 10% tariff rate, but a 15% hike makes that harder to pull off.

The National Retail Federation, a retail trade association, weighed in on the escalating trade war Friday, ahead of Trump’s tweets laying out the specifics.

“There are no winners in a trade war, and right now, both sides are losing,” said Jonathan Gold, vice president of supply chain and customs policy at the group. “American businesses and consumers continue to be caught in the crosshairs.”


Read More: Trump Says He’s Raising Tariffs on China After Its Retaliation

Home Depot Inc., Lowe’s Cos., Mattel Inc. Hasbro Inc., Walmart Inc., Target Corp., Best Buy Co., Macy’s Inc., Kohl’s Corp., J.C. Penney Co. and the Toy Association didn’t immediately respond to email requests for comment.

David French, senior vice president of government relations for the NRF, said it’s “impossible” for businesses to plan for the future in the current climate.

“The administration’s approach clearly isn’t working, and the answer isn’t more taxes on American businesses and consumers,” he said. “Where does this end?”

Before May, the average U.S. consumer had largely escaped direct impact from U.S. tariffs on Chinese imports, with the previous rounds focusing more on agricultural items like fish and produce as the Trump administration tried to avoid the backlash that taxing consumer goods might bring. But consumer items like handbags were added to the list in the spring, with the upcoming rounds expected to hit everything from footwear to electronics.

“We urge both governments to cease all punitive tariffs and return to the negotiating table,” Rick Helfenbein, president and chief executive officer of the American Apparel & Footwear Association, said in an emailed statement after China’s $75 billion round was first announced. “It is time that we end this senseless game of tariff ping-pong, before undue harm comes to our economies and our consumers.”

After Trump announced plans to increase the levies further, Helfenbein decried the “tit-for-tat tariff hikes.”

“Two and a half years we have been promised a new and innovative approach, yet what we’ve been given is a 1930s trade strategy that will be a disaster for American consumers, American businesses and the American economy,” Helfenbein said. “Meanwhile, the president has said he wants American businesses to stop working in China, yet he doesn’t seem to understand that moving a supply chain is incredibly complicated and expensive. It takes years to build relationships that meet compliance standards and deliver quality products, yet we have been given weeks and in this case days. This is not how you negotiate.”

— With assistance by Matthew Boyle

(Updates with additional AAFA statement in final two paragraphs.)

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