The entire U.S. retail industry is facing tough times, with the recent tariff challenges leaving even seasoned industry experts puzzled. All companies are eager for clarity, but the White House's unpredictable implementation, threats, and revocation of tariffs have made it difficult for businesses of all sizes to plan ahead. While large enterprises like Walmart or Amazon still have room to negotiate with overseas suppliers, most retailers are small independent companies, caught in a situation where they are at the mercy of circumstances.
According to The New York Times, in many industries such as apparel, most products are manufactured in China or other countries, with few American-made options available. Data from the Peterson Institute for International Economics shows that last year, 75% of U.S. imported toys and sporting goods, 40% of footwear, and 25% of textiles and clothing came from China.
Vivian Hoffman, who has been in the retail business for half a century, experienced the turmoil after the 9/11 attacks, the financial crisis, and the pandemic. Recently, she has been managing a chain store called Whim, which sells affordable women's clothing. Most of her products come from China and Vietnam. Faced with a 145% tariff on China and the possibility of Vietnam being subject to high tariffs in a few months, one of her suppliers recently increased shoe prices by 20%, and others indicated they would soon raise prices as well. A denim supplier from China even couldn't determine how to price their fall product line. Hoffman said she has been hesitating, "Should I order less because I think business will be affected? Or should I order more before prices go up? I've been wavering between these two extremes."
In an interview with CNBC on October 10, Amazon CEO Andy Jassy stated that the company had expedited the shipment of some inventory to the United States before the tariffs were implemented and would attempt to "renegotiate terms" with some suppliers. Amazon has a special program where suppliers sell products to Amazon at lower prices, and Amazon covers the cost of shipping to the U.S. and directly bears the tariff costs. However, when the risk of tariffs changes, Amazon cancels orders accordingly.
No matter how small retailers respond, they cannot achieve the flexibility and strength of Amazon. Kim Vaccarella, founder of Bogg, which sells handbags and accessories, sources all her products from China. She visited Sri Lanka and Vietnam to find new suppliers and received samples from a manufacturer in Vietnam, preparing to place an order. However, news broke that the White House planned to impose more than 40% tariffs on Vietnam, forcing her to abandon the effort. "After doing so much and spending so much money, nothing was achieved."
Original article: https://www.toutiao.com/article/7493134048601260555/
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