The US Trade Representative’s office confirmed this week that an extra 5% tariff will be imposed on Chinese imports worth $300bn, which prompted hundreds of US retailers to warn consumers of impending price hikes.
As of 12.01am on September 1st, a 15% tariff will apply to footwear and apparel worth around $33bn, while another round of 15% tariffs is scheduled to be introduced on December 15th that is expected to apply mostly to electronic goods, as well as to toys.
Intelligence Node, a retail analytics firm, warned that these tariffs are likely to have a significant impact on holiday season sales and that more than half (54%) of US consumers are concerned about the impact of tariffs on their wallets.
Based on a nationwide poll of 1,000 adults and analysis of last year’s Amazon Prime Day event, Intelligence Node reported that consumer electronics and retail and apparel goods are viewed by 58% as the most important to find on sale before purchasing – the very goods that are likely to be hit hardest by the trade war.
“These goods are in the crosshairs of the escalating global tariff conflict, whereby prices at brick and mortar and online are expected to rise,” the report warned.
“Any slowed growth in sales could negatively impact retailers’ supply chains and their ability to procure new merchandise for 2020 and beyond,” it added.
The survey findings also showed that US consumers tend not to wait until the big calendar deal days to grab a good bargain and instead look around for deals when they need them.
Around 42% reported waiting “sometimes” for these big holiday sales events, while a third (32%) said they “rarely” waited for these sales. According to Intelligence Node, this means retailers could create their own Amazon Prime Day by deploying “dynamic pricing strategies”.
“The impending tariffs will bite into everyone’s margins,” said Sanjeev Sularia, co-founder and CEO of Intelligence Node. “Being able to optimise prices to maximise your margins, while putting great products into the hands of consumers at a price they feel is fair is key right now.”
Sourced from Reuters, Intelligence Node; additional content by WARC staff