File Photo: A container of China COSCO Shipping Corporation Limited is seen at the Port of Long Beach, Los Angeles County, the United States, Aug. 23, 2018. (Xinhua/Li Ying)
by Huang Heng, Tan Yixiao
ESTES PARK, the United States, Sept. 22 (Xinhua) -- Steve Taylor has run a small grocery for 16 years in Estes Park, a small town located at the foothill of Rocky Mountain in north Colorado. He said he had to wait and see what would come out of the U.S.-China trade frictions.
"We'll have to wait and see. Our buying season will be next Spring," he told Xinhua on Friday about trade frictions between the United States and China.
Estes Park is a popular summer resort attracting tourists from all of the world, and most of products in shops there are labeled "Made in China."
The United States, disregarding overwhelming international and domestic opposition, recently announced the imposition of additional 10-percent tariffs on 400 billion U.S. dollars worth of Chinese products from Sept. 24.
In response, China announced on Tuesday it will add additional tariffs on U.S. products worth 400 billion dollars starting from Sept. 24.
For retailers like Taylor, the first snow of this year has not fallen, but the whole industry has been preparing for it for several months.
RETAILERS MAKE PREPARATIONS
"Tariffs on most consumer products have yet to take effect but retailers appear to be getting prepared before that can happen," Jonathan Gold, vice president for Supply Chain and Customs Policy of the National Retail Federation (NRF), said in July after the number of containers imported set a new record for single month in June.
As Gold predicted, the latest monthly Global Port Tracker report issued by the NRF and Hackett Associates on Sept. 10 showed that July and August continued posting record arrivals of containers.
Ports covered by the report handled 1.9 million Twenty-Foot Equivalent Units (TEU) in July, up 2.8 percent from June and up 5.6 percent year-on-year. A TEU is one 20-foot-long cargo container or its equivalent.
The report estimated the tally in August at 1.92 million TEU with a rise of 4.8 percent year-on-year, becoming the third month in a row to set a new record for the number of containers imported during a single month.
"The current boom in shipping can primarily be explained by importers' response to the U.S. trade war with China," Hackett Associates founder Ben Hackett explained in a press release.
"Consumers appear to be spending money on goods ahead of the tariff price increases that will eventually come. But there could be a rocky road ahead as the impact of tariffs begins to be more fully felt," he predicted.
"More tariffs could come any day, and retailers have been bringing in record amounts of merchandise ahead of that in order to mitigate the impact on their customers," Gold said.
The NRF emphasized that imports don't necessarily mean sales, but the solid number of containers coming into the country could indicate that retail sales during the crucial holiday season won't flounder because of tariffs, at least not this year.
IMPACT TO APPEAR IN WINTER
Everybody knows that the price increases caused by the tariffs will inevitably come like a storm in the Rocky Mountain's winter. Imports are expected to eventually fall from September due to the tariffs, and the report predicted that imports in January 2019 will fall to 1.77 million TEU.
"As thousands of businesses have testified and explained in comments to the administration, tariffs are a tax on American families," NRF President and CEO Matthew Shay said in a statement issued last week regarding the U.S. move to impose additional tariffs on Chinese goods.
"It's disappointing that, despite the voices of those impacted, the administration continues to advance harmful tariff policies that threaten to weaken the U.S. economy," the statement read.
"Every time this trade war escalates, the risk to U.S. consumers grows. With these latest tariffs, many hardworking Americans will soon wonder why their shopping bills are higher and their budgets feel stretched," it said.
"The mere talk of tariffs on all remaining Chinese imports is of serious concern to retailers since tariffs of that magnitude would touch every aspect of American life," said the statement.
The NRF, the world's largest retail trade association, also rebuked that President Donald Trump administration's thinking -- using tariffs to push companies to manufacture more goods in the United States -- saying it is flawed since carefully planned supply chain plans can't be redrawn overnight and retailers must order their products six months to a year in advance.
QUESTIONS FOR FINDING OTHER SUPPLIERS
"The administration continues to overestimate the ability of US companies to shift supply chains out of China," the Washington-based trade group was reported as saying in a letter to the United States Trade Representative Robert Lighthizer.
"Global supply chains are extremely complex. It can take years to find the right partners who can meet the proper criteria and produce products at the scale and cost that is needed," the letter said.
Moreover, in an interview with Nation Public Radio, David French, senior vice president of government relations at the NRF, questioned if the retailers can find other suppliers outside of China.
"The other big question is capacity. China is a large country with a lot of people, and they can manufacture a lot of things," French said.
"That capacity doesn't exist everywhere in the world. In fact, it doesn't exist in most parts of the world. The final thing to think about is -- if retailers or importers could have sourced anywhere else at the same price, at the same level of quality, they already would have done so," he said.
Both Gold and French stressed that comparing to big companies such as Walmart or Target, small business owners like Taylor running business in the small mountain town will be hit by the tariffs harder. A recent NRF survey showed that 46 percent of smaller retailers expect the trade war will hurt their businesses.
"Some small retailers are telling us that they're likely to go out of business as a result of these tariffs because they can't pass on -- they can't absorb the cost, and they can't easily pass it on to consumers," French said.