Trade war could impact retailers’ holiday plans
An escalating trade war with China could put a dent into the holiday shopping season.
President Trump has threatened to add a 10% tariff on at least an additional $200 billion of Chinese-made goods, potentially doubling that to as much as $400 billion if China retaliates. Such a move could impact about 80% of all Chinese imports and ensure some sneakers, clothing, smartphones and even toys would be targeted, Bloomberg reported. The first round of tariffs, on $34 billion of Chinese goods, went into effect on Friday, July 6.
“Retailers have already made the buying decisions for what will be on the store shelves in the fall for Christmas holidays,” David French, senior VP of government relations at the National Retail Federation told Bloomberg. “If items aren’t imported before any possible tariffs go into effect, it will lead to “higher prices, a cut into consumer spending and a cut into consumer confidence — and we are very concerned about it.”
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RILA: Global trade war has begun
A leading retail association issued a stern warning about the impact of tariffs on American consumers and workers.
The Retail Industry Leaders Association said that American families and workers will be most impacted by the barrage of tariffs imposed on consumer products from China, and U.S. exports to the European Union, Canada, Mexico, and China. RILA issued its statement on Friday, July 6, the same day that a 25% tariff on $34 billion worth of Chinese imports to the U.S. went into effect. Chinese authorities retaliated with, as they had previously warned, equivalent tariffs on $34 billion worth of imported U.S. goods, ranging from vehicles to soybeans, beef and other agricultural products.
The U.S. tariff list includes:
• 25% tariff covering $34 billion in U.S. exports to China
• 25% tariff covering $34 billion in imports from China
• 10%-25% tariff covering $12.5 billion in U.S. exports to Canada
• 10%-25% tariff covering $3 billion in U.S. exports to Mexico
• 10%-25% tariff covering $3.4 billion in U.S. exports to the European Union
“There is no longer a ‘threat’ of a global trade war — the battle has begun,” said Hun Quach, VP of international trade for RILA. “These tariffs are officially being imposed on products sold by American businesses, and consumed by American families. Americans are caught in the crosshairs of the Administration’s three-front trade war, and they will be the ones paying the price. The recent onslaught of tariffs will jeopardize manufacturing and agriculture jobs in the U.S., while driving up prices on household items.
Quach noted that retailers support a level playing field for America on the global stage, but “punishing American families and the millions of American workers whose jobs are supported by trade is not the way to strengthen our trading relationships.”
“This tranche of tariffs on both exports and imports threatens our nation’s prosperity, and will imperil millions of jobs if allowed to persist,” she said. “We continue to encourage the Administration to focus its trade negotiations on solutions and shield American families from the barrage of tariffs coming from all directions.”
Hudson’s Bay in talks for possible joint venture
The parent company of Saks Fifth Avenue and Lord & Taylor confirmed on Friday that it is in talks regarding a potential joint venture for its European business.
In a statement, Hudson’s Bay Co. said that it is in discussions with Austria-based Signa Holding GMBH, and has signed a non-binding letter of intent with respect to the exploration of a potential joint venture. Hudson’s Bay and Signa separately operate Germany’s two major department store chains, Kaufhof and Karstadt. Kaufhof operates 96 stores in Germany, while Karstadt has 82.
The retailer noted that contrary to recent reports it has not signed a binding agreement to sell or combine its European business or properties. The announcement follows a report by The Wall Street Journal that the department store company had agreed to sell half of its European operations to Signa in a deal estimated at more than $1 billion in cash.
Hudson’s Bay said that any potential transaction is subject to further review and analysis by HBC, approval of HBC’s board and many other conditions.
“There can be no assurance that any such discussions will ultimately lead to a transaction,” the retailer said.