The will they-won’t they tariff roller coaster is about to go for another spin, and retailers are hoping it will stop soon.
In another attempt to stave off Christmas-time levies on a raft of consumer-facing goods, a senior Chinese delegation including vice premier Liu He is making its way to Washington for another round of negotiations.
The talks, which begin today, will be the most serious to take place since the G20 in Osaka, Japan, in June when President Donald Trump sat down with China’s President Xi Jinping.
While both sides insisted the talks in Japan were productive, the trade dispute has only escalated since. For fashion, that meant the U.S. administration placing 15 percent tariffs on large swathes of apparel and footwear last month, with more to be hit in mid-December.
Handbag retailers will also feel more pain in the next few days as tariffs rise again, this time from 25 to 30 percent on Oct. 15.
Ahead of Thursday’s meeting, the National Retail Federation urged the two countries to come up with a solution, before it negatively impacts retailers during the vital holiday season, which makes up the lion’s share of their profits.
“Retailers are doing all they can to mitigate the impact of tariffs on their customers. The effect on prices will vary by retailer and product during the holiday season, but ultimately these taxes on America businesses and consumers will result in higher prices,” NRF vice president for supply chain and customs policy Jonathan Gold said.
“We urge the administration to use this week’s talks with China to make progress toward ending the trade war and return to policies that promote long-term economic growth and prosperity for American families,” he continued.
The group is expecting imports at the nation’s major retail container ports to hit their highest level of the year again next month just before more tariffs take effect in December, according to its global port tracker in conjunction with consulting firm Hackett Associates.
“This is the last chance to bring merchandise into the country before virtually everything the United States imports from China comes under tariffs,” added Gold.
And higher prices for consumers might not be the only issue for retailers if the trade dispute persists. Minutes to the Federal Reserve’s latest meeting revealed that policymakers are concerned that it could result in companies letting workers go, which in turn would add to the spending squeeze.
“One risk that the economy faced was that the softness recorded of late in firms’ capital formation, manufacturing and exporting activities might spread to their hiring decisions, with adverse implications for household income and spending,” it said.
In the run-up to the meeting, investors have been hanging on every hint, resulting in topsy-turvy market reactions. On Wednesday, the Dow Jones closed up 0.7 percent, or 182 points, to 26,346.14. This was the first time in three days it’s ended in the black and it came despite reports that China had lowered its expectations for the outcome of the talks.
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