US Retail Giants And Associations Oppose Trade Wars, Clothing And Furniture Sales Slump

According to foreign media reports, the United States may promote tariffs on imports of 200 billion US dollars in recent days, but it is not yet clear whether the tariffs that the United States will levy will be 10% or 25%.

In May this year, the United States announced tariffs on steel and aluminum products for Europe, Canada and Mexico. In July and August, the United States announced tariffs on meat, beverages, tobacco, automobiles, medical equipment and machinery, which undoubtedly made American manufacturers and retailers feel the pressure.

It is not until 2019 that the retail industry may feel the full impact of these tariff measures. However, the additional cost of Chinese goods will undoubtedly affect the trade of the United States, especially if China continues to honor the threat of retaliatory tariffs on the United States.

For many retailers,

Tariffs will significantly increase production costs, but some large US electricity suppliers say they can withstand rising prices.

However, small businesses may not be so lucky.

It is reported that eMarketer, the market research firm, is the first to examine the impact of tariffs from the perspective of top US electricity supplier companies.

The picture shows 10 large retailers in the United States.

Total sales volume (as of July 2018):

The impact of tariffs on e-commerce platforms and small sellers

Amazon and eBay two big business giants rely on small sellers selling on their platforms.

EBay relies heavily on this platform mode, but even if it is right.

For example, its platform sales account for 68% of the total sales, and this growth rate is faster.

As many small retailers in the US are sourcing products from China, tariffs may slow the growth of electricity suppliers' sales.

These sellers are not as strong as WAL-MART and The Home Depot, so they may have to raise their prices or reduce their purchases to China next year.

According to the seller's discussion on the web message board, some of the platform sellers didn't expect to be too much affected by the tariff, while others thought it could help to recapture the advantage that the Chinese sellers lost their prices.

Data from Consultation Service Co Teikametrics show that the number of Chinese sellers who sell goods directly to American consumers through the Amazon FBA delivery plan has increased rapidly, increasing by 100% over the past 6 months.

Products that are in a dilemma: electronics, clothing and furniture.

Best Buy, the US electronics retailer, is unlikely to be "unscathed" in the tariff war.

As the cost of raw materials increases, the prices of TV and electronic products may rise.

In June this year, a large list of taxes announced by the office of the United States Trade Representative (USTR) included television components and monitors.

In August this year, the Apple Corp submitted a document to the Securities and Exchange Commission, detailing the possible negative impact of tariffs on the company.

The specific negative effects are not yet clear, but the new round of tariffs will include health trackers. If the 200 billion tariff really goes into effect, it will affect the sale of Apple Watch Apple smart watches.

Apple will be able to bear some of the losses, so the company may not pass the higher price on to consumers.

But from a larger perspective, the decline in profits may affect Apple's earnings and may have an impact on the US economy, especially after Apple became the first US company to have a market capitalization of $one trillion in August.

Although American luxury brands such as Michael Kors and Tapestry have been turning to purchasing raw materials from Vietnam and other countries in the Asia Pacific region, retailers such as Messi, Macy's sell many brands of clothes, shoes and handbags, so leather is the only way to buy them.

Levying tariffs on cotton, fabrics and man-made textiles such as polyester can affect the sales of these retailers.

Furniture sales will be greatly affected by tariffs, especially for online retailers like Wayfair, whose margins are very low and are heavily dependent on Chinese products.

These discount retailers also have an efficient supply chain that starts overseas, and this supply chain can not be completely pformed overnight.

The retail mode and low profit of US retail giant Costco may also be affected by tariffs.

In 2017, before implementing the tariff, Richard Galanti, executive vice president and chief financial officer (CFO) of Costco, estimated that about 25% of the products of the company were manufactured overseas.

Wide coverage in China

Many retailers and trade associations have been strongly opposed to tariff wars.

In March 2018, 24 retailers, including Costco and WAL-MART, expressed concern about the tariffs on consumer goods.

The Retail Industry Leaders Association, USA

American Apparel & Footwear Association and National Retail Federation have also released their positions. The data they quoted showed that over 41% of clothing products, more than 72% of footwear products and more than 84% of tourism products in the US market were made in China.

Although Dong Minglun, President and CEO (Chief Executive Officer), Doug McMillon acknowledged the uncertainty of the proposed tariffs in the second quarter earnings call conference in 2018, he said: "the number of goods we buy in the United States is far more than that purchased from any other country." (Doug)

But buying from us suppliers does not necessarily mean that these products are produced in the United States.

Although WAL-MART did not disclose the number of products sold from China, but according to the American Manufacturing Alliance (Alliance for)

WAL-MART has been proactive in reducing potential problems arising from tariffs.

According to reports, the retail giant asked whether some cosmetology products suppliers could purchase products in other countries.

The effect of tariffs on large enterprises is relatively small.

Home Depot may be used as a test case because the retailer has been influenced by taxes on timber and laundry.

In its second quarter earnings conference in 2018, the company mentioned that these imports would have an impact on sales.

Carol Tom Tom, the chief financial officer of home depot, speculated that tariffs could increase the cost of its sales by $300 million, but on the contrary, $300 million is a "controllable figure" for its annual sales of $100 billion.

The US family shopping channel QVC also adopted similar practices in its second quarter earnings call conference in 2018.

The president and CEO Mike George (Mike George) admitted that tariffs had risks for their sales, but this effect was "fairly modest impact" and considered that the impact ranged from 10 million to 15 million dollars.