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Business Mayor
23-05-2025
- Business
- Business Mayor
Trump tariff pause bumps up China imports, but less retail choice and higher prices are coming: CNBC Supply Chain Survey
On Monday, Gene Seroka, executive director of the Port of Los Angeles, said some companies are cutting it really close with their seasonal product orders. Fewer shipping containers are expected to enter major U.S. ports in the coming weeks even as some imports rebound from trade war lows, based on commentary from the Port of Los Angeles. 'While the de-escalation deal moves us in the right direction, we need to move much farther and much faster to avoid more damage to the economy,' said Stephen Lamar, CEO of the American Apparel and Footwear Association. 'Clarity, not more confusion and costs, needs to be the order of the day,' he said. Separately, retailers tell CNBC even with the reduction in the steepest tariffs on Chinese goods from 125% to 30%, the import taxes remain too high to complete full orders. The ' stacking of existing tariffs ' has many companies paying well over 30%. The CNBC Supply Chain Survey was conducted between May 14 and 16, with approximately 100 responses to these questions fielded from a sample including freight and logistics services providers, retailers, and consumer goods companies. The majority of respondents to a recent CNBC Supply Chain Survey (59%) said they are not seeing a restart in holiday orders from importers since the announcement of the trade war pause. Among those saying order activity has resumed, over half (53%) say those orders are full holiday orders. The recent pause on the steepest tariffs on Chinese goods has led importers to boost stalled orders from Asia, but not by enough to eliminate the risk of retail shortages in the months ahead, according to a new survey from CNBC and interviews with logistics executives and retailers. 'That'll leave us with fewer selections of products and likely higher prices,' Seroka said. 'But for now, uncertainty remains in every business meeting that I have, and trying to find a way to make the best decisions for companies possible still remains elusive.' He said that means consumers should expect lower inventory across retail sectors and in the parts supply chains for American factories. 'What we'll see is a little bit of an uptick in bookings in Asia cargo coming over,' Seroka said. 'You won't see a deluge of freight here at the Port of Los Angeles,' he added. Seroka said he does not see a container surge similar to the pandemic coming to the Port of Los Angeles since the port has less than 30% of the number of containers it had during the peak of Covid. 'Think summer fashion, back to school, Halloween,' said Seroka. 'May is traditionally the month where a lot of purchase orders go in for the year-end and Christmas holidays. It typically takes about three months to send an order to a factory, have those goods made and get them ready to ship from Asia to the United States.' The freight business is impacted by the ongoing trade pressures, with port labor and trucking and rail industries that depend on container volumes also taking a hit. 'Currently, we are experiencing a significant decline since the end of Q1,' said Paul Brashier, vice president of global supply chain at ITS Logistics. 'This decline is primarily attributed to the high tariffs imposed on Chinese goods. Some volume was buoyed by front-loading and alternative sourcing from Southeast Asia, India, and Europe. However, we expect this downward trend to continue throughout May and into early June, while shippers restart import operations from China.' Brashier said because some orders have been un-paused, there will be a short-lived container increase, but it will not be a sustained Covid container 'surge.' After ocean carriers cut down on vessel sailings due to the trade war, they will need to ramp up vessel capacity quickly to accommodate the sudden increase in cargo, and for shippers to get their cargo in by the peak season cargo deadline of Aug. 14, according to Alan Murphy, CEO of Sea-Intelligence. 'This means cargo needs to be shipped no later than by mid-July,' he said. On the Transpacific trade to the North America West Coast, he said there has not yet been what he would call 'a meaningful injection of new capacity,' while on the East Coast, he added that there has already been some attempt to increase capacity relative to just a week ago. More than half of the CNBC survey respondents answering a question about blanked sailings say they remain concerned about available ocean freight space. Front-loading of orders will help retail, for now To some extent, the rush of orders earlier this year, the 'front-loading' ahead of tariffs, has created some room for retail inventory to be effectively managed. Retailers tell CNBC they were forced to abandon some freight at the ports because it was too expensive to pay the expected tariffs on China. Logistics respondents said that abandoned freight was moved to the secondary market, auction houses, and special bonded warehouses called 'General Order,' where, after six months, if the goods are not cleared within that timeframe, they may be sold at auction, donated, or retained by the government. U.S. Customs oversees these warehouses. Brett Rose, CEO of United National Consumer Suppliers, which supplies products to stores such as Macy's, T.J. Maxx, Marshalls, Ross Stores and third-party Amazon sellers, said he is seeing activity increase in the secondary market. 'While retail will undoubtedly feel the ripple effects of new tariffs over time, in the near term, we're seeing the market absorb the shock differently,' said Rose. 'There's currently a significant buffer in the form of excess inventory in the secondary market,' he added. UNCS says in the last quarter alone, it tracked nearly $500 million worth of surplus goods already onshore and circulating domestically. 'This oversupply is helping to insulate immediate pricing pressures, but that cushion won't last forever,' Rose said. Jon Gold, vice president of supply chain and customs policy at the National Retail Federation, tells CNBC there is still a great deal of uncertainty for businesses on how to proceed in the coming months, with retailers planning to purchase and rush shipments for the holiday season to avoid tariff increases in mid-August, but with the headwind of increased freight costs as ocean carrier capacity constraints run up against restarted orders. 'The lack of forward clarity is adding to the confusion, and to the costs incurred from the importer down to the consumer,' said Alan Baer, CEO of OL USA. Noah Hoffman, vice president for retail logistics at C.H. Robinson, says the timing for Christmas imports is a question mark, with three major factors at play. 'Consumer demand is muted, ocean shipping rates are elevated, and tariffs are as volatile as ever,' said Hoffman. 'What's the bigger gamble during this 90-day window? Pulling holiday inventory forward while ocean rates are up and demand signals are uncertain, or waiting too long and risking that tariffs go up again? That's the conversation a number of retailers and retail suppliers are having with us right now,' he said. Consumer spending optimism is low In answer to a question on holiday order priorities, 59% of respondents to the CNBC survey said they are focused on lower-priced goods, while 29% said promotional items. When asked what types of products are getting hit the hardest, 42% of respondents answering this question said discretionary products, followed by luxury (26%), furniture (19%) and travel (13%). Close to one-third among more than 50 companies taking the CNBC Survey who answered a question about level of pullbacks in orders for the holidays put the range at between 20%-29%. In separate interviews with brands and retailers, CNBC was told inventories range from one to three months and the risk of empty shelves for some products can be measured in a similar time frame. Retailers are being careful about how they discuss price increases after President Donald Trump blasted both Amazon and Walmart in recent weeks over their plans and commentary on tariffs and consumer inflation. On Tuesday, Home Depot said it would 'generally maintain' prices on products even with tariffs, a few days after Trump told Walmart to 'EAT THE TARIFFS' in a social media post, and said he would be watching what the company did. On Wednesday, Amazon CEO Andy Jassy said there has been no slowdown in spending to date due to tariffs. But Target cuts its full-year sales outlook on Wednesday, citing tariffs among several other factors. Optimism on consumer spending in the CNBC survey was low, with 75% of over 80 respondents asked if they foresee a consumer pullback saying yes, and 53% of an almost equal number of total respondents saying that pullback has already started. Within the retail supply chain, pricing pressure is already percolating, according to Adam Davis, managing director of Wells Fargo Retail Finance. 'We have seen upward pressure on pricing recently, which might impact the ultimate retail price and degree of discounts offered as retailers navigate the evolving tariff environment in concert with current and future inventory levels,' said Davis. His concerns include retailers that have recently reduced inventory purchases, as well as price increases, but he added that the higher prices will be selectively applied. 'We anticipate pricing adjustments to be methodical and specific to certain items versus a broad-brush approach,' Davis said, adding that making changes over time can help 'to soften the impact to customers' from increasing prices on specific items versus 'everything at once.' For small businesses, there is less room to absorb cost increases. 'It is impossible for small brands to eat the costs of these tariffs,' said Bruce Kaminstein, a member of NY Angels and founder and former CEO of cleaning products company Casabella. In interviews, retailers told CNBC tariffs become unsustainable for the company based on their current margins at 30% to 40%. Recession risks still high amid trade war uncertainty More than half of 80 respondents to the CNBC survey who answered a question on recession risk said they are still betting on an economic downturn, though the timing of that was split between those who say the recession has already begun (23%), and almost equal groupings of those who see it coming in the quarters ahead, from Q3 and Q4 of this year, to 2026. Mark Baxa, CEO of the Council of Supply Chain Management Professionals, said that mixed view on recession timing makes sense given what the supply chain is experiencing. 'We are in the midst of shifting sourcing and purchasing patterns, driven by a mix of current and anticipated consumer purchasing shifts, consumer pullback, and recession fears,' said Baxa. 'Results are mixed in terms of timing and actions businesses are taking,' he said, but he added that the overall sentiment 'is that supply chains anticipate fiscal headwinds as the year unfolds.' Expectations for a freight recession, specifically, are similarly spread out over time, according to the survey results. 'We'll have a clearer picture by July, when two factors converge, how many trade deals the U.S. has made with other countries before higher reciprocal tariffs are slated to kick in again, and how much freight demand there is after produce season and beverage season peak,' said Ronnie Davis, vice president for North American surface transportation at C.H. Robinson. 'Sometime this summer, we'll know whether this 90-day lowering of tariffs between the United States and China holds and how much holiday inventory might have been pulled forward in the meantime.' Trump has said the global trade war is about bringing manufacturing back to the U.S., but the survey shows the continued pattern of choosing a 'China-plus-one' strategy, and setting up manufacturing in another country, a shift that began during Trump's first trade war with China in 2017. Respondents to the survey who answered a question on freight and supply chain shifts say Vietnam continues to be the top outsourcing destination (66%), followed by India (55%), Malaysia (31%) and Cambodia (21%), with the remaining identifying other countries like Sri Lanka, Canada, Mexico, the Dominican Republic, Singapore, Sweden, Thailand and Pakistan.
CNBC
22-05-2025
- Business
- CNBC
Trump tariff pause bumps up China imports, but retail shelf supply risk remains elevated: CNBC Supply Chain Survey
The recent pause on the steepest tariffs on Chinese goods has led importers to boost stalled orders from Asia, but not by enough to eliminate the risk of retail shortages in the months ahead, according to a new survey from CNBC and interviews with logistics executives and retailers. The majority of respondents to a recent CNBC Supply Chain Survey (59%) said they are not seeing a restart in holiday orders from importers since the announcement of the trade war pause. Among those saying order activity has resumed, over half (53%) say those orders are full holiday orders. The CNBC Supply Chain Survey was conducted between May 14 and 16, with approximately 100 responses to these questions fielded from a sample including freight and logistics services providers, retailers, and consumer goods companies. Separately, retailers tell CNBC even with the reduction in the steepest tariffs on Chinese goods from 125% to 30%, the import taxes remain too high to complete full orders. The "stacking of existing tariffs" has many companies paying well over 30%. "While the de-escalation deal moves us in the right direction, we need to move much farther and much faster to avoid more damage to the economy," said Stephen Lamar, CEO of the American Apparel and Footwear Association. "Clarity, not more confusion and costs, needs to be the order of the day," he said. Fewer shipping containers are expected to enter major U.S. ports in the coming weeks even as some imports rebound from trade war lows, based on commentary from the Port of Los Angeles. On Monday, Gene Seroka, executive director of the Port of Los Angeles, said some companies are cutting it really close with their seasonal product orders. "Think summer fashion, back to school, Halloween," said Seroka. "May is traditionally the month where a lot of purchase orders go in for the year-end and Christmas holidays. It typically takes about three months to send an order to a factory, have those goods made and get them ready to ship from Asia to the United States." Seroka said he does not see a container surge similar to the pandemic coming to the Port of Los Angeles since the port has less than 30% of the number of containers it had during the peak of Covid. "What we'll see is a little bit of an uptick in bookings in Asia cargo coming over," Seroka said. "You won't see a deluge of freight here at the Port of Los Angeles," he added. He said that means consumers should expect lower inventory across retail sectors and in the parts supply chains for American factories. "That'll leave us with fewer selections of products and likely higher prices," Seroka said. "But for now, uncertainty remains in every business meeting that I have, and trying to find a way to make the best decisions for companies possible still remains elusive." The freight business is impacted by the ongoing trade pressures, with port labor and trucking and rail industries that depend on container volumes also taking a hit. "Currently, we are experiencing a significant decline since the end of Q1," said Paul Brashier, vice president of global supply chain at ITS Logistics. "This decline is primarily attributed to the high tariffs imposed on Chinese goods. Some volume was buoyed by front-loading and alternative sourcing from Southeast Asia, India, and Europe. However, we expect this downward trend to continue throughout May and into early June, while shippers restart import operations from China." Brashier said because some orders have been un-paused, there will be a short-lived container increase, but it will not be a sustained Covid container "surge." After ocean carriers cut down on vessel sailings due to the trade war, they will need to ramp up vessel capacity quickly to accommodate the sudden increase in cargo, and for shippers to get their cargo in by the peak season cargo deadline of Aug. 14, according to Alan Murphy, CEO of Sea-Intelligence. "This means cargo needs to be shipped no later than by mid-July," he said. On the Transpacific trade to the North America West Coast, he said there has not yet been what he would call "a meaningful injection of new capacity," while on the East Coast, he added that there has already been some attempt to increase capacity relative to just a week ago. More than half of the CNBC survey respondents answering a question about blanked sailings say they remain concerned about available ocean freight space. To some extent, the rush of orders earlier this year, the "front-loading" ahead of tariffs, has created some room for retail inventory to be effectively managed. Retailers tell CNBC they were forced to abandon some freight at the ports because it was too expensive to pay the expected tariffs on China. Logistics respondents said that abandoned freight was moved to the secondary market, auction houses, and special bonded warehouses called "General Order," where, after six months, if the goods are not cleared within that timeframe, they may be sold at auction, donated, or retained by the government. U.S. Customs oversees these warehouses. Brett Rose, CEO of United National Consumer Suppliers, which supplies products to stores such as Macy's, T.J. Maxx, Marshalls, Ross Stores and third-party Amazon sellers, said he is seeing activity increase in the secondary market. "While retail will undoubtedly feel the ripple effects of new tariffs over time, in the near term, we're seeing the market absorb the shock differently," said Rose. "There's currently a significant buffer in the form of excess inventory in the secondary market," he added. UNCS says in the last quarter alone, it tracked nearly $500 million worth of surplus goods already onshore and circulating domestically. "This oversupply is helping to insulate immediate pricing pressures, but that cushion won't last forever," Rose said. Jon Gold, vice president of supply chain and customs policy at the National Retail Federation, tells CNBC there is still a great deal of uncertainty for businesses on how to proceed in the coming months, with retailers planning to purchase and rush shipments for the holiday season to avoid tariff increases in mid-August, but with the headwind of increased freight costs as ocean carrier capacity constraints run up against restarted orders. "The lack of forward clarity is adding to the confusion, and to the costs incurred from the importer down to the consumer," said Alan Baer, CEO of OL USA. Noah Hoffman, vice president for retail logistics at C.H. Robinson, says the timing for Christmas imports is a question mark, with three major factors at play. "Consumer demand is muted, ocean shipping rates are elevated, and tariffs are as volatile as ever," said Hoffman. "What's the bigger gamble during this 90-day window? Pulling holiday inventory forward while ocean rates are up and demand signals are uncertain, or waiting too long and risking that tariffs go up again? That's the conversation a number of retailers and retail suppliers are having with us right now," he said. In answer to a question on holiday order priorities, 59% of respondents to the CNBC survey said they are focused on lower-priced goods, while 29% said promotional items. When asked what types of products are getting hit the hardest, 42% of respondents answering this question said discretionary products, followed by luxury (26%), furniture (19%) and travel (13%). Close to one-third among more than 50 companies taking the CNBC Survey who answered a question about level of pullbacks in orders for the holidays put the range at between 20%-29%. In separate interviews with brands and retailers, CNBC was told inventories range from one to three months and the risk of empty shelves for some products can be measured in a similar time frame. Retailers are being careful about how they discuss price increases after President Donald Trump blasted both Amazon and Walmart in recent weeks over their plans and commentary on tariffs and consumer inflation. On Tuesday, Home Depot said it would "generally maintain" prices on products even with tariffs, a few days after Trump told Walmart to "EAT THE TARIFFS" in a social media post, and said he would be watching what the company did. On Wednesday, Amazon CEO Andy Jassy said there has been no slowdown in spending to date due to tariffs. But Target cuts its full-year sales outlook on Wednesday, citing tariffs among several other factors. Optimism on consumer spending in the CNBC survey was low, with 75% of over 80 respondents asked if they foresee a consumer pullback saying yes, and 53% of an almost equal number of total respondents saying that pullback has already started. Within the retail supply chain, pricing pressure is already percolating, according to Adam Davis, managing director of Wells Fargo Retail Finance. "We have seen upward pressure on pricing recently, which might impact the ultimate retail price and degree of discounts offered as retailers navigate the evolving tariff environment in concert with current and future inventory levels," said Davis. His concerns include retailers that have recently reduced inventory purchases, as well as price increases, but he added that the higher prices will be selectively applied. "We anticipate pricing adjustments to be methodical and specific to certain items versus a broad-brush approach," Davis said, adding that making changes over time can help "to soften the impact to customers" from increasing prices on specific items versus "everything at once." For small businesses, there is less room to absorb cost increases. "It is impossible for small brands to eat the costs of these tariffs," said Bruce Kaminstein, a member of NY Angels and founder and former CEO of cleaning products company Casabella. In interviews, retailers told CNBC tariffs become unsustainable for the company based on their current margins at 30% to 40%. More than half of 80 respondents to the CNBC survey who answered a question on recession risk said they are still betting on an economic downturn, though the timing of that was split between those who say the recession has already begun (23%), and almost equal groupings of those who see it coming in the quarters ahead, from Q3 and Q4 of this year, to 2026. Mark Baxa, CEO of the Council of Supply Chain Management Professionals, said that mixed view on recession timing makes sense given what the supply chain is experiencing. "We are in the midst of shifting sourcing and purchasing patterns, driven by a mix of current and anticipated consumer purchasing shifts, consumer pullback, and recession fears," said Baxa. "Results are mixed in terms of timing and actions businesses are taking," he said, but he added that the overall sentiment "is that supply chains anticipate fiscal headwinds as the year unfolds." Expectations for a freight recession, specifically, are similarly spread out over time, according to the survey results. "We'll have a clearer picture by July, when two factors converge, how many trade deals the U.S. has made with other countries before higher reciprocal tariffs are slated to kick in again, and how much freight demand there is after produce season and beverage season peak," said Ronnie Davis, vice president for North American surface transportation at C.H. Robinson. "Sometime this summer, we'll know whether this 90-day lowering of tariffs between the United States and China holds and how much holiday inventory might have been pulled forward in the meantime." Trump has said the global trade war is about bringing manufacturing back to the U.S., but the survey shows the continued pattern of choosing a "China-plus-one" strategy, and setting up manufacturing in another country, a shift that began during Trump's first trade war with China in 2017. Respondents to the survey who answered a question on freight and supply chain shifts say Vietnam continues to be the top outsourcing destination (66%), followed by India (55%), Malaysia (31%) and Cambodia (21%), with the remaining identifying other countries like Sri Lanka, Canada, Mexico, the Dominican Republic, Singapore, Sweden, Thailand and Pakistan.
New York Times
15-05-2025
- Business
- New York Times
How 4 Small Business Owners Are Handling Tariffs on China
President Trump lowered his tariffs on China, and Wall Street breathed a sigh of relief. But for many businesses, especially small ones, 30 percent is still a crippling burden. The 145 percent tariff on Chinese goods that was in place for nearly a month was unthinkably high for businesses large and small. But even at the current levels, the overall average tariff rate on imports to the United States remains at its highest level since 1934, according to a report from the Yale Budget Lab released on Monday. Even Walmart, the largest retailer in the United States, said on Thursday that it would have to raise prices on some items in response to tariff-fueled cost increases. And tariffs could rise again if the two countries do not reach a deal within 90 days. The 90-day pause 'may temporarily help unstick the effective trade embargo that has been in place,' Steve Lamar, the chief executive of the American Apparel and Footwear Association, said in a statement. But, he added, the 30 percent tax will still cause prices to soar during the back-to-school and holiday seasons later this year. 'What's needed now is a long-term deal — not just with China but with all our trading partners — so we can predictably make long-term trade, investment and sourcing decisions,' Mr. Lamar said. Unlike large retailers, which can absorb some of the cost of tariffs and have the heft to pressure suppliers, smaller companies that rely on imports from China tend to have minimal leverage to negotiate with their Chinese suppliers — and relatively tight margins. We talked to four business owners about the strategies they are trying as tariffs cut into their bottom line. Cut the cheapest items Marina Rosin Levine is the chief executive of Highline United, a footwear company near Boston, which makes roughly half of its items in China. This week, she visited her supply chain headquarters in the Chinese city of Dongguan, where conversations centered on a key question: Which shoes can it afford to sell in the United States? The answer might at first sound counterintuitive: Only the company's most expensive shoes — those priced at $200 or more — will start to make their way to the United States. Customers who can afford the more expensive shoes can probably afford the additional cost from the import tax. And margins on lower-value items are too tight for the company to import them and turn a profit. 'That means the consumer with lower discretionary income is the one that's going to be impacted the most in terms of what's in stock,' Ms. Levine said. A pair of $400 boots might be available. But $99 Mary Janes probably won't be, at least for now. Consider layoffs The latest easing is not reassuring to Cheyenne Smith. When Mr. Trump imposed triple digit tariffs on China in early April, Ms. Smith, who designs children's rain boots that are made in China, contemplated drastic measures to save money. She considered closing a warehouse in Salt Lake City where she stores items for her brand, called Dakota Ridge, and laying off her work force of three employees. Her costs were rising at the same time that her sales were falling, dampened by customers' dreary outlook on the economy. Insufficient cash flow, especially for the busy holiday season later this year, became a pressing concern. Mr. Trump's move to temporarily ease up on tariffs offered little relief. 'The word 'temporary' scares me,' said Ms. Smith, who was still considering moving her inventory to her garage and laying off her staff. 'I have zero trust in how long this is going to last, or if it will go higher or lower again.' Put new products on pause Luis Prior, who owns Meavia Toys, a small toy company in Corbin, Ky., said the 145 percent tariff rate on Chinese imports was 'completely unsustainable.' Had it stayed in place for several months, it would have meant the end of his business, which designs sensory toys for children with special needs and manufactures its products in China. Shortly after Mr. Trump unveiled his suite of tariffs on April 2, Mr. Prior halted all production of his toys and held his breath, hoping for a reprieve. Now, with the tariff rate down to 30 percent, Mr. Prior said he planned to restart manufacturing some of his most popular toys again and get them to the United States as soon as possible. Still, tariffs at 30 percent mean higher prices for his customers. And a lack of clarity from the Trump administration on what will happen in 90 days has kept his plans to introduce new items on pause. 'It's still a very unstable and unnerving situation for small businesses that rely on China,' Mr. Prior said. 'I don't know what's going to happen tomorrow.' Split the cost Mike Roach, who co-owns a women's apparel store, Paloma Clothing, in Portland, Ore., made plans on Tuesday to approach his vendors that manufacture in China with an idea: He and his wife, the vendor and the vendor's manufacturer would each take a 10 percent hit. Under that arrangement, shoppers would not see prices rise. Whether Mr. Roach's vendors and their Chinese suppliers all agree is an open question. But, he said, the latest easing in tariff levels at least makes the discussion possible. 'There's no mitigation you can do at 145 percent,' Mr. Roach said. 'That is a complete deal breaker.'
Yahoo
14-05-2025
- Business
- Yahoo
Trump's 'Deal' With China Leaves American Consumers and Exporters Facing Higher Tariffs Than Before
On its own, the deal struck Monday between the U.S. and China to de-escalate the trade war is undeniably a positive development. As part of the deal, the U.S. will temporarily lower tariffs on Chinese imports from 145 percent to 30 percent (which will be applied on top of other tariffs imposed by the first Trump administration). That may be enough to stave off the worst consequences of the tariffs and might unfreeze the flow of goods across the Pacific Ocean. More broadly, however, the deal is a tidy illustration of how President Donald Trump has conducted his global trade war. With China, Trump hiked tariffs to astronomical levels while promising those taxes (which are paid by Americans) would unleash prosperity and create jobs. Then, the White House celebrated the agreement that reduced those tariffs as "the art of the deal." They are literally doing the meme. But the "deal" means that imports from China will be subjected to significantly higher tariffs than when Trump took office. Those tariffs will continue to be a serious economic burden for American businesses and consumers, and the threat of even higher tariffs remains—because the "deal" only pauses those tariffs for 90 days, and because Trump's mercurial nature means no one can really be sure what is coming next. "A pause is not a solution. It's a stay of execution for small businesses that still don't know future product costs, and in many cases have taken steps that can't be undone," wrote Dan Anthony, president of the Trade Partnership Worldwide, an international economic think tank. Steve Lamar, president of the American Apparel and Footwear Association, called the 90-day pause "welcome" because it may thaw what had effectively become a trade embargo between the two countries. However, the remaining 30 percent tariff, which is stacked on top of preexisting tariffs from Trump's first term, "will still make for an expensive back to school and holiday season for most Americans," Lamar said in a statement. "If freight rates spike due to the tariff-induced shipping disruptions—which will take months to unwind—we could see costs and prices creep up even further." The Penn Wharton Budget Model's tariff simulator estimates that the remaining 30 percent tariff on all imports from China would be a $639 billion tax increase over 10 years. Meanwhile, American exports to China will also face higher tariffs in the wake of this "deal" than they did in the pre-Trump status quo. The 10 percent tariff that China will continue charging on American imports will be one of the highest tariffs in the world for American goods entering foreign countries, notes Bryan Riley, director of the National Taxpayers Union's Free Trade Initiative. That's despite the White House repeatedly claiming that Trump's trade war is intended to lower barriers to American exports. By their own metric, this deal fails. Any de-escalation of what could be a catastrophic trade war between the world's two biggest economies is an encouraging sign, but both America and China are still worse off than they were a few months ago. Trump has used constitutionally dubious economic powers to raise and then lower tariffs, creating huge costs and even greater uncertainty. Rather than praising the president for backing down from an insane position, as the White House believes Americans should do, the proper response to Trump's latest tariff maneuvers is the same as it has always been: Congress must take away his tariff powers. The post Trump's 'Deal' With China Leaves American Consumers and Exporters Facing Higher Tariffs Than Before appeared first on
Axios
12-05-2025
- Business
- Axios
Minnesota corporations rally after tariff pullback
Most of the Minnesota Fortune 500 public companies that took the biggest hit from President Trump's April 2 tariff announcement have rebounded beyond pre-"Liberation Day" levels. Why it matters: Trump's tariffs on China — which on Monday he rolled back from 145% to 30% for 90 days — had raised fears of supply shortages, layoffs and higher prices, including at Minnesota's largest companies. Target's Brian Cornell was among the retail CEOs who warned Trump of empty shelves if the tariffs remained in place. Zoom in: Best Buy, which was hit hardest by the tariff announcement, has nearly recovered from the 16.8% tumble it took between April 1 and April 7. Yes, but: The combination of the 30% China tariff and pre-existing tariffs "will still make for an expensive back to school and holiday season for most Americans," American Apparel and Footwear Association CEO Steve Lamar said in a statement. "If freight rates spike due to the tariff-induced shipping disruptions — which will take months to unwind — we could see costs and prices creep up even further," he added.
