We are in the dog days of summer and the trade war continues to heat up.
As you may have heard, last week President Trump announced that the remaining $300 billion (List 4) of products imported from China will be slapped with a 10% tariff starting Sept 1st, 2019.
According to Macy’s CEO this is “the big one” and will have consumer impact.
Many categories including smartphones, electronics, apparel, shoes, and toys are included in the $300 billion list.
This means you can expect higher prices this Christmas.
The list of products included in last year’s trade tariffs contained fewer consumer goods.
On the other hand, this year’s 4th quarter is promising to look grim for many retailers and ecommerce sellers as the trade tariff grinch could be stealing their Christmas!
You can check if your products’ are affected by searching if your HS codes are included here. https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-china/300-billion-trade-action
But China is not taking this lying down.
They reacted by announcing a halt to US agricultural imports among other products.
Moreover the Chinese Yuan or RMB has dropped to the lowest exchange rate in a DECADE as a response by weakening to 7.05 RMB to 1 USD
If we were to look at the past 12 months, this is a 3% drop from 6.83 on August 5, 2019 to 7.05 on August 5, 2019.
What can you do?
Now may be the time to renegotiate prices with your Chinese suppliers given the weakening Chinese Yuan.
Thinking of sourcing away from China?
India has become a viable alternative to China – Checkout this masterclass Meghla Bhardwaj gave on How to Source Products from India. She is also leading a sourcing trip to India in Oct. And you will get a $200 discount for being a loyal reader.