In the latest escalation of U.S.-China trade tensions, China will institute new tariffs on $60 billion worth of U.S. goods on Sept. 24.
Macy’s CEO Jeff Gennette is one of many retail industry leaders who has acknowledged the potential impact of the tariffs, telling CNBC that they would “affect a department store retailer more significantly because of the apparel pieces that are going to be part of it. What I can say is that we’ve been looking at our own supply chain, we’ve been looking at our own private brands and we’ve prepared for this.”
Beijing will impose levies on a total of 5,207 U.S. products — ranging from liquefied natural gas to certain types of aircraft as well as cocoa powder and frozen vegetables — at 5% and 10% rates, instead of previously proposed rates of 5%, 10%, 20% and 25%, according to the Chinese Finance Ministry.
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On Sept. 17, President Donald Trump announced plans to impose 10% percent tariffs on $200 billion worth of Chinese imports, effective Sept. 24. Those duties will rise to 25% on Jan. 1, 2019.The world’s two largest economies already have applied tariffs to $50 billion of each other’s goods.
Trump warned that if China takes retaliatory action against U.S. farmers or industries, “we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.”
The National Retail Federation (NRF), which has taken a position against the tariffs, recently teamed with 80 other trade organizations to form a multi-industry coalition, Americans for Free Trade. NRF CEO Matthew Shay has criticized the tariffs for months, saying that they will increase the costs of everyday consumer goods and could slow down retail’s rebound in 2018.
“Every time this trade war escalates, the risk to U.S. consumers grows,” Shay said in a statement. “With these latest tariffs, many hardworking Americans will soon wonder why their shopping bills are higher and their budgets feel stretched. We cannot afford further escalation, especially with the holiday shopping season right around the corner. The mere talk of tariffs on all remaining Chinese imports is of serious concern to retailers since tariffs of that magnitude would touch every aspect of American life.”
The Retail Industry Leaders Association (RILA) is also part of the coalition, and shares the same views as NRF.
“Tariffs are a tax on American families, period,” said Sandy Kennedy, President of RILA in a statement. “This escalating trade war threatens to tax every aspect of our American lifestyle, from the clothes on our back and the food we eat to the cars we drive and shoes we wear. We welcome the opportunity to work with this wide array of industries to showcase the value that trade provides American families and the real impact that a misguided trade war will have on them.”
The new coalition is coordinating with Farmers for Free Trade in a multi-million-dollar national campaign named Tariffs Hurt the Heartland. The campaign is focused on telling the stories of the American businesses, farmers, workers and families harmed by tariffs through town-hall style events, grassroots outreach to Congress and the administration, social media, rapid response and digital advertising.
