For The (Not) Love Of Tariffs — Retail and the Economy In Crisis; China Tariffs As High As 245%
Amazon putting suppliers on the hook. Moody‘s seeing odds of downturn at 60%. Five dollar Temu T-shirt now $11 — upending fast fashion business models, possibly forever..
“Consternation over the tariffs and its impact on consumer sentiment on retail sales could end up being worse than the impact of inflation,” said David Silverman, senior director of the corporates group at Fitch Ratings, which lowered its rating for the U.S. retail and consumer product sector to “deteriorating” from “neutral.”
Last year, three-quarters of all toys and sporting goods, 40 percent of all footwear and 25 percent of all textiles and clothing imported into the United States came from China.
ECONOMIC HIGHLIGHTS
Read below to find out what’s going on with Amazon. University of Michigan data follows as well.
Year-ahead inflation expectations surged to 6.7%, the highest reading since 1981, from 5%.
US tariffs on China’s goods could now be as high as 245%: minimum applicable tariff at 145% plus any prior levies, such as Section 301 tariffs on specific goods, of between 7.5% and 100%.
China’s tariffs on US goods are currently 125%; China is levying other penalties, too, such as on Hollywood films.
De minimis treatment ends May 2, with ultra-fast fashion business models being up-ended, as small orders and air shipping are no longer efficient and margins erode.
Al Jazeera reporting that “China says it will pay no attention to Trump’s tariff numbers game”. Economists have said if not eased, the tariffs will bring a halt to most trade between China and the US, due to the exorbitant rise in costs. The ‘joke’ comments are here.
Consumer confidence hit its second-lowest measurement since 1952.
Fitch lowered its rating for the US retail and consumer product sector to “deteriorating”.
Bloomberg economist Anna Wong noting that the latest increases in tariffs on China will disproportionately hurt consumer goods.
Moody’s stating that a likely result of import duties will be rising unemployment and inflation.
Moody’s analysts changed their outlook from “stable” to “negative”. Tariff impacts will affect most sub-segments, with off-price being impacted the least. Moody’s analyst Christina Boni, “Consumer demand was already tepid, with many discretionary categories struggling. Higher costs will eat at profitability, barring significant price increases or vendor concessions.”
JPMorgan Chase (and Moody’s) seeing odds of recession in 2025 at 60%.
Steve Madden is actively working to reduce the percentage of goods it imports from China. Madden may selectively — surgically — raise prices, starting in the fall.
Walmart is seeing intra-day/week sales volatility, and is having hard time predicting operating income growth, due to the effects of the tariffs.
Amazon is canceling some orders, and is working to renegotiate terms with some suppliers. As a result of the cancellations, suppliers are now stuck holding the ball, and will be on the hook to import the goods, pay the tariffs, and renegotiate a higher wholesale price with Amazon.
Hobby Lobby is currently delaying — not canceling — some orders from China.
The University of Michigan consumer sentiment for the US plunged to 50.8 in April 2025, the lowest level since June 2022, from 57 in March, well below forecasts of 54.5.
Vietnam is the second largest exporter of clothes and shoes to the United States, after China. The country has set itself apart with some unique skills — as an example, Vietnam has specialized factories for high-tech running shoes. The region is a key manufacturing hub for Nike and Adidas, among other companies.
Vietnam has requested a 45-day delay on the tariff imposition. The Vietnamese President and President Trump are in talks now.
Reuters highlights a few smaller-scale operations. One such company, Day Owl (super-cute canvas backpacks) projects that it has 30 days before it will fold, if the Vietnamese tariffs aren’t significantly reduced.
The firm has paused future orders.
Glossy reported on other stories of struggle and strife.
The clothing firm Rumored counts Taylor Swift among its fans.
It’s no ‘rumor’ that the tariffs wiped out Rumored’s margins overnight, and this was on the heels of what had been 400% wholesale growth.
https://unsplash.com/@ryunosuke_kikuno
The company has had to back out of orders with major retailers and all future production.
Rumored has long relied on Chinese manufacturers, but asserts it’s not so easy to change your manufacturing partners on the fly:
We’re not a billion-dollar company that can absorb this, and we don’t have the capital to flip supply chains overnight,” Rumored CEO, “We’re just trying to survive.”
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