How will the us retail sector respond to the threat of new tariffs from the trump administration?
Imports of major U.S. retail container ports in August are expected to remain high this month and for the rest of the year, according to the monthly global ports tracking report released by the national retail federation and HackettAssociates.
More immediately, the U.S. retail industry is gearing up for the holiday shopping season: the busiest import season for U.S. retailers is August, September and October.
"It's three months to prepare for the holidays."So consumers will feel price increases very quickly, said DavidFrench, senior vice President of government relations at the NRF.
Zhou shijian, a senior researcher at tsinghua university's center for sino-american relations, who worked at the Chinese embassy in Washington for many years, told China business news that the United States is now dependent on China for daily goods.
Forcing consumers to buy American is not realistic
According to the global ports tracking report, the major U.S. ports covered by the database imported 1.8 million TEU(standard case) in June, compared with an estimated 1.86 million TEU in July.The August estimate is 1.91 million TEU;1.85 million TEU in September;1.91 million TEU in October;1.84 million TEU in November;1.81 million TEU in December.
JonathanGold, vice President of supply chain and customs policy at the NRF, explains the outlook. Even if almost all related imports are affected by tariffs, retailers won't change their supply chains quickly or easily, meaning U.S. households will end up paying more for the goods they can't live without.It's time to stop punishing American businesses, workers and families.
Mr. Zhou noted that the U.S. retail sector is heavily dependent on foreign imports, and that two-thirds of Chinese exports to the U.S., for example, are consumer goods.
Among them, the United States imports 86% of toys from China, 61% of travel luggage and bags, 60% of shoes, 44% of furniture, 37% of textiles and apparel, and 27.1% of mechanical and electrical products.Laptops and tablets accounted for 94 percent, digital cameras 40 percent and color televisions 27 percent.
Zhou shijian, who has done relevant statistics in the commercial office of the embassy in the United States, told China business news that there are basically no domestic leather shoes in the United States now. In the American market, there were 22 pairs of leather shoes per capita in 1986, 11 pairs in 1996, 1 and a half pairs in 2006, and only one pair in 2016.
For example, more than 90 percent of laptops come from China, U.S. newspapers reported a $125 price increase (after the tariffs were imposed), and U.S. college students will need to buy laptops after they graduate in June.Mr Zhou said.
Previously, US President Donald trump announced the new "made in America" executive order on July 16, asking the us federal government to consider modifying the former US President Dwight Eisenhower's 1954 executive order 10582, and upgrading the standards of "buy American" related regulations.
Mr Zhou told China business news that such an idea was unrealistic and that the result was that us consumers would pay for it.
Anti-globalisation efforts such as "buy American" are impossible.Zhou shijian told China business news, "after world war ii, the United States adjusted its labor-intensive industries out of the country after three major industrial adjustments. Now, how is it possible to move back?"
To be sure, the NRF has previously calculated that U.S. taxpayers have paid more than $27 billion in additional import duties from the trump administration's repeated tariff threats in 2018 until June of this year.The additional tariffs would cost American consumers an additional $12.2 billion a year, including $4.4 billion on clothes, $2.5 billion on shoes, $3.7 billion on toys and $1.6 billion on appliances.
Mr Franch points out that it is impossible to require everyone in the retail sector to shift purchases, which is unrealistic.In the short term, retailers will have to stick with existing suppliers and pass on higher costs to consumers.
The United States fashion industry association (USFIA) also estimates that the tariffs will cost American consumers $4.9 billion a year in extra clothing, or $60 a year for a family of four.
Underperforming retailers forced layoffs
In response to the tariffs, us retailers collectively warned that a new round of tariffs could accelerate job cuts in one of the most underemployed industries."For companies that are on shaky ground, this [tariff] just pushes them over the edge faster," said Julio hughes, President of the us fashion industry association.
Us workers will be the first to receive unemployment notices, says GaryWakley, senior vice-president of footwear procurement at Fila, the sportswear company.
WadeMiquelon, chief executive of the fabric and crafts chain jo-ann, said: "we have tough decisions ahead of us, including layoffs and store closures."
Currently, employment in the U.S. retail sector has begun to shrink under the impact of e-commerce: data released by the federal reserve and the U.S. department of labor in August showed that the U.S. retail sector employed 49,000 fewer people in July 2019 than in July 2017.Department stores, clothing chains and electronics stores are among the first to suffer, but the total number of layoffs would be even worse if grocery stores and auto dealers weren't hiring more.
As a result, the retail sector became the first major sector in the U.S. to experience a significant decline in employment, and virtually every major sector of the U.S. economy gained jobs over the past two years, with the exception of utilities.About 370,000 jobs in e-commerce related transportation and warehousing have been added since July 2017.Industries from professional services to health care also continued to open their doors to hiring last month.
By contrast, retail sales lost another 3,600 seasonally adjusted jobs in July, according to the latest job market data.Within the retail sector, department stores cut a net 3,700 jobs and electronics stores a net 5,700, but the increase in grocery hiring cushioned the blow from shopping.
It is worth pointing out that several of the world's largest retailers, including BestBuy, Gap and macy's, have continued to fall sharply in the wake of the latest tariff threat, after underperforming the s&p 500 this year.