A 25 percent tariff on shoes from China "would be catastrophic for our consumers [and] our companies," according a letter signed by more than 150 European and U.S. shoe manufacturers and shoe retailers, which was sent to President Donald Trump May 20. Footwear is not currently on the Section 301 list, but the president is considering adding tariffs on all Chinese imports.
CBP's decision to move a total 731 officers from the northern border to the southern border could affect trade coming from Canada, Livingston International said in a blog post. "As we head into peak travel season, the reduction of officers on the northern border is expected to cause delays for both travelers and commercial shipments," the company said. "As a result, commercial transports may experience longer-than-usual wait times for shipments entering the United States from Canada."
The U.S.-China trade talks “put Alibaba on the right side of all the issues on the table,” Executive Vice Chairman Joseph Tsai said on a fiscal Q4 earnings call May 15. Calling the trade war the big “elephant in the room,” Tsai spoke as if a comprehensive trade accord was already in the bag. China’s “commitment to purchase more American products” means it will become a “net importing country,” reducing the U.S.-Chinese trade imbalance, he said. The Chinese e-commerce giant is "not concerned about slowing China exports affecting GDP growth because the Chinese economy is shifting from an export economy to a domestic consumption economy,” he said. "The middle class in China has reached critical mass of over 300 million, almost as large as the entire U.S. population," Tsai said. "The middle class will double in the next 10 years, especially from the lesser-developed Chinese cities. While total Chinese domestic consumption is $5.5 trillion today, consumption from these third-, fourth-, and fifth-tier cities, with a combined population of 500 million people, will triple from $2.3 trillion to nearly $7 trillion in the next 10 years." China in recent years also has made "significant improvements in reducing" intellectual property theft, as it "moves closer to global norms in protecting and paying for foreign IP," he said. Any trade accord with the U.S. will help further that goal, he said. “The vexing issues in the trade negotiations will resolve themselves, as the Chinese economy is already evolving to close the gap between the interests of the United States and China.”
Walmart is working with suppliers to manage prices in the wake of the Trump administration’s tariff increase, from 10 percent to 25 percent, imposed last week on $200 billion worth of Chinese goods -- and the threatened $300 billion fourth tranche of goods covering virtually all remaining Chinese imports not previously tagged -- but increased tariffs “will increase prices for customers,” Chief Financial Officer Brett Biggs said on a May 16 earnings call. The retailer continues to monitor tariff discussions, “hopeful that an agreement can be reached,” Biggs said. The company’s goal “is to always be the low-priced leader, and we will actively manage pricing and margins as warranted with our customers and shareholders in mind.” Walmart teams focused on tariffs are “executing appropriate mitigation strategies,” he said. Biggs told Reuters the retailer will look to ease the pain for consumers, in part by trying to obtain products from different countries and working with suppliers’ “costs structures to manage higher tariffs.” In Q1, revenue rose 1 percent vs. a year ago to $123.9 billion, tempered by currency headwinds, the company said. Walmart U.S. Q1 revenue was $80.38 billion. Traffic in U.S. stores, now called transactions, rose 1.1 percent, while Q1 tickets grew 2.3 percent. E-commerce sales were “robust,” at 37 percent growth, and contributed 140 basis points to the U.S. segment’s comp sales increase, Biggs said.
Descartes bought CORE Transport Technologies of New Zealand for about $21 million, with a future performance-based earn-out of as much as $9 million, the companies said in a news release. CORE is "an electronic transportation network that provides global air carriers and ground handlers with shipment scanning and tracking solutions."
E2open will buy Amber Road for about $425 million, the companies said in a news release. The all-cash deal was approved by the Amber Road board of directors and remains subject to "customary closing conditions," the companies said.
GoPro remains "on track" to begin "ramping" its "U.S.-bound" action-camera production this quarter in Guadalajara, Mexico, as a proactive hedge against possible future Section 301 tariffs on Chinese goods, Chief Financial Officer Brian McGee said on a Q1 earnings call May 9. GoPro has no current exposure to the three rounds of tariffs imposed since July, but wanted protection anyway against new duties, he said. Guadalajara's production ramp will "support" U.S. sales beginning in Q3, McGee said. "We expect most of our U.S.-bound cameras will be in production in Mexico in the second half of 2019." GoPro's decision to shift production from China to Mexico for most cameras destined for U.S. import "supports our goal to insulate us against possible tariffs, as well as recognize some cost-saving and efficiencies," he said. GoPro says it's keeping production of non-U.S. cameras in China because it's an important strategic hub and the Chinese consumer market loves the product.
The Southern Shrimp Alliance welcomes the hike to 25 percent on List 3 of the Section 301 tariffs, because, it notes, the 10 percent tariff only reduced imports of frozen breaded shrimp by 22 percent. The alliance said that there was $115 million worth of Chinese breaded shrimp imported in the U.S. from October to February, and that's virtually the same volume of imports as in 2017. Nearly all other frozen shrimp is subject to substantial antidumping duties, the alliance said. But breaded shrimp "is not subject to antidumping dutiesand prior to September 24th, importers paid no duties on any breaded shrimp shipped from China."
The National Council of Textile Organizations complained that finished Chinese textile home furnishings and apparel don't face Section 301 tariffs yet, while immediate inputs for U.S. mills, such as yarn and fabrics, will be taxed at 25 percent. “Chinese imports of finished goods into the U.S. market have the most significant impact on domestic textile and apparel production, investment and jobs. In order to address the crisis, we need to get to the very heart of the problem," NCTO CEO Kim Glas said. The group said that 93.5 percent of Chinese textile exports to the U.S. are consumer goods, not inputs.
A farmer in Indiana who grows soybeans and corn said that with President Donald Trump's tweet on China on May 5, corn prices dropped 4 percent, or another $50,000, for the unsold crop and expected summer harvest on his 5,000-acre farm. Before the trade war, a typical profit for the farm that Brent Bible runs with a partner would be about $225,000. This year, he's expecting a loss.