As the US-China trade war drags on, Presidents Trump and Xi will be meeting in Japan this weekend as the G-20 Economic Summit takes place.
All eyes will be on the two leaders to see if they can make some sort of progress as recently the trade war has escalated into a “technology cold war”.
What will happen as a result of this meeting? I see two potential outcomes.
On one hand, if we look at the last time the two leaders met in person in Argentina several months ago, they were able to reach a 90-day truce in the trade war. Though it didn’t end the trade war at least they bought some time to try to make progress.
This time in Japan, we will see if the two leaders can make progress as they give each other some facetime to discuss the issues on the table.
On the other hand, a worst case scenario for ecommerce sellers would be if the talks fell apart and if the US slaps the additional 25% in tariffs on the remaining $300 billion worth of goods not covered by the previous lists.
In essence this would be THE WHOLE ENCHILADA or basically EVERYTHING manufactured in China and imported to the US would face an additional 25% in tariffs.
Virtually no business can absorb this hit and not pass the costs onto the consumer. Case in point: Walmart and Costco have already announced that they are raising prices due to the trade tariffs.
For the average US consumer, this would mean more expensive clothes for back to school, more expensive halloween costumes, and more expensive holiday gifts.
This will be an interesting weekend.
PS: if you would like to learn more about how the trade war is affecting ecommerce sellers, checkout my recent interview on the Trademarks Made Easy podcast with Suzi Hixon. One great takeaway is to Search US Customs and Border Patrol records to help identify options for sourcing – Listen now