Supply worries

Calls for tariffs on Chinese imports unnerve retailers.

With President Donald Trump’s administration hinting Friday that it is considering tariffs on nearly all Chinese imports, Walmart and other U.S. retailers face the possibility of paying more for their Christmas-season inventory. Shoppers, in turn, will feel the effect of the tariffs in their pocketbooks.

Retailers place orders months in advance, so merchandise for the 2018 holiday season was ordered last year, industry experts said. Those products are already aboard ships on their way to the U.S., and existing tariffs will be assessed on the goods when they come in to port.

“It’s not like retailers can turn that boat around and send it back to China,” said Hun Quach with the Retail Industry Leaders Association.

It’s also too late for retailers to find new suppliers of their holiday goods. Quach, the association’s vice president for interna-

tional trade, said logistical factors such as shipping contracts prevent sudden shifts in sourcing.

“Some changes can be made, but at the end of the day, supply chains can only be stretched so far,” she said. “Too much disruption will eat away at any gains made by avoiding tariffs.”

A Walmart spokesman who said the company “isn’t commenting on this issue at this time” referred questions to the Retail Industry Leaders Association and the National Retail Federation. Spokesmen for both groups said they do not discuss specific retailers, but could address the tariff issue on behalf of the retail industry.

Various publications provide an idea of the scope of Walmart’s reliance on Chinese suppliers, however.

A 2015 report from the Economic Policy Institute stated Walmart’s share of U.S. imports from China grew 11 percent between 2001 and 2013, making the retailer “a key conduit of Chinese imports into the American

market.”

More recently, the Journal

of Commerce reported in May that Walmart led its 2017 list of top 100 U.S. importers. Rounding out the top 10 are Target, Home Depot, Lowe’s, Dole Food, Samsung America, Family Dollar Stores, LG Group, Phillips Electronics North America, and IKEA International.

Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation, agreed with Quach that finding reliable suppliers doesn’t happen overnight.

“These are longstanding relationships,” he said. “It will take years to change those relationships, and for retailers to check all the issues like safety, quality of product, and sustainability.”

Gold said the federation is working hard to ensure the administration and members of Congress fully understand the impact tariffs would have on retailers, workers, and consumers. History has shown that tariffs hurt jobs, businesses, and the economy, he said.

“We’re encouraging the administration to talk more about how to get China to

the table and address our trade relationship in a way that is more transparent to the public, “Gold said. Another goal is to get the administration to address how to get out of the tariffs and find other means of resolving trade issues with China.