Retailers wrestle with volatile China trade policy
NEW YORK — Lance Ruttenberg knows too well how fast President Donald Trump’s China trade policies can change.
As president and CEO of American Textile Co., he and his team spent weeks on a comprehensive study analyzing how a 10% tariff set for Sept. 1 would affect their business, which makes thousands of bedding items for hundreds of retailers.
Then on Tuesday, Ruttenberg learned the tariffs on his type of goods would be delayed until the holidays. And while the news brought momentary relief, he’s still trying to sort out what it all means.
“Everybody is in a confused state,” Ruttenberg said. “We are not afraid of challenges. But it’s hard to address challenges when you have no ability to predict them or anticipate them. This constant uncertainty is a terrible burden to navigate.”
Welcome to the world of Trump’s tariff wars with China, which can turn everything upside-down with just a presidential tweet.
Trying to run a business when the administration’s trade policy continues to shift almost daily has been difficult, and many retailers and consumer product makers like American Textile say they’re devoting so much time adjusting to each whim that they can’t focus on other areas like developing innovative products. This past Christmas Eve, signs marking discounts on coats at a Columbia store at the Outlet Malls in Castle Rock, Colo, weren’t unusual. But this year, tariffs may strike these goods on Dec. 15.
Items targeted for tariffs pop up on one list, only to be dropped months later, or vice versa. Meanwhile, businesses are left to change their supply network modeling as often as weekly instead of semi-annually or annually, says Fred Baumann, global group vice president at JDA, a technology company that works with retailers on their sourcing networks.
Company executives also complain that it’s hard to offer financial forecasts, which in turn makes it more difficult to get loans.
“It’s very frustrating,” said David French, senior vice president of government relations at the National Retail Federation, the nation’s largest retail trade group. “Retailers want to get back to competing and driving customers to their stores. Retailers want to be investing to become better retailers, not moving around their supply chain that is subject to a presidential tweet.”
Trump has already imposed 25% tariffs on $250 billion in Chinese imports. The 10% tariffs on another $300 billion would extend import taxes to just about everything China ships to the United States.
The new tariffs are likely to be a game changer: The earlier ones were designed to limit the impact on consumers by targeting industrial goods. The next ones, which target items such as toys and clothing, will hit families in the pocketbook.
Mindful that the latest round would raise consumer prices during the crucial holiday shopping season, the administration delayed nearly 60% of them until Dec. 15.
Businesses say they spent hours combing the lists to see which items were delayed and which weren’t. Meanwhile, analysts will be dissecting comments by retailers over the next couple of weeks when they report fiscal second-quarter earnings to see how the tariffs have been playing out.