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Small Businesses, Footwear Companies To Be Hit Hard With Tariff Hike
Next week, China is expected to raise tariffs on $60 billion worth of U.S. goods and products, following Pres. Trump’s decision to raise duties on Chinese goods. Which sectors of the retail industry are likely to feel the pinch the most?
Ray Wimer is an assistant professor of retail practice at Syracuse University’s Martin J. Whitman School of Management. He says small businesses and retailers that heavily rely on Chinese production, like footwear companies, are likely to be hardest hit.
“If a trade agreement doesn’t come to pass, it will hurt U.S. retailers and consumers.
“The retailers that would be hardest hit are those that are heavily exposed to their production in China – think most footwear as a prime example. I know retailers have been trying to diversify their production and supply chain away from China but it is still heavily depended on Chinese manufacturing.
“The tariff costs can’t be absorbed in total by retailers themselves, so retailers will have to pass some of the cost on to the consumer. The question is how much of increased cost will be passed along.
“Finally, the biggest issue I think are the small businesses in the U.S. that may be driven out of business with the higher tariffs, especially in how long they will remain in effect.”
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