Mhlnews 11369 Iphone5
Mhlnews 11369 Iphone5
Mhlnews 11369 Iphone5
Mhlnews 11369 Iphone5
Mhlnews 11369 Iphone5

US Consumer Back in Firing Line With Trump's China Move

Aug. 2, 2019
The proposed new 100% tariffs on $300 billion of Chinese goods will tax the country's most popular consumer goods.

The tariff threat to consumer goods is back on.

After a one-month truce with China, President Donald Trump announced by tweet he would impose a 10% tariff on $300 billion in Chinese imports that aren’t yet subject to U.S. duties -- the same week the two economic superpowers held a fresh round of trade talks.

Should he follow through with the move, set for Sept. 1, Trump would bring the American shopper into the fray like never before. It would effectively tax everything the world’s factory sends to the U.S., with some of America’s most-popular consumer goods targeted. Smartphones and laptops to sneakers and toys have managed to stay off Trump’s tariff lists in the past, so this new threat already has trade groups calling it a direct hit on the U.S. consumer.

“We are dismayed,” Matt Priest, president of the Footwear Distributors and Retailers of America, said in a statement.

The tariffs, which Trump later said could go “well beyond” 25%, would target industries that had been relatively spared by the trade war thus far.

Here are some stories that look at how that impact may be felt:

Apple’s Phones

Mobile phones are the biggest Chinese export by value yet to be tariffed.

Apple Inc. spent decades building one of the largest supply chains in the world, with most of its products designed in the U.S., but then assembled in China. That makes it one of the most exposed companies to this new round of tariffs.

Trump’s latest salvo will likely trigger a response from China, with the country running out of U.S. goods it can counter-tariff. In disputes with other nations in the past, it’s used other measures: from boycotts to hitting out at companies.

  • Apple warns of risks as  China supply chain exposed
  • China's wrath could see big-name brands singled out

Shoes to Power Tools

In a statement after Trump’s tweet on August 1, the U.S.’s Retail Industry Leaders Association said the latest move puts American consumers “squarely in the crosshairs.”

“Tariffs are taxes on American consumers -- and if these tariffs happen, American consumers will bear the brunt of these tactics via higher prices on everyday items like clothing, toys, home goods, and electronics,” the trade group said.

  • From May: Trump’s China tariff grenade puts shoppers back on notice
  • The average American consumer is finally getting pulled into the trade war
  • Small businesses feel the squeeze
  • Coach bags languish in Vietnam port in painful tariff workaround
  • New tariffs are a setback for P&G plant in Trump country
  • From June: J.C. Penney says women apparel would bear the brunt of proposed tariffs
  • Citigroup says taxing everything China exports would be  10 times worse

The Suppliers

Will this spell the end of ‘Made in China’?

The country will see more factory shutdowns as the trade war that’s roiled the global supply chain exacerbates an exodus, Spencer Fung, chief executive officer of Li & Fung Ltd, the world’s largest supplier of consumer goods, told Bloomberg last month.

  • The supplier to Walmart to Nike says China's factories are getting 'urgent and desperate'
  • The world’s top bicycle maker has already  called an end to China's rein
  • And companies are worried about who could be next -- Vietnam?

The Europeans

European firms risk getting caught in the crossfire, including shoemakers such as Adidas AG and Puma SE. Both were among 173 footwear companies to sign a letter in May urging Trump to reconsider tariffs he was threatening to impose at the time.

  • Puma is feeling the heat from the trade war
  • From May: Shoemakers call tariffs  'catastrophic'

By Cécile Daurat

Latest from Global Supply Chain