Christmas and many other goods will be more expensive for American consumers this year due to Donald Trump’s trade wars. For the first time in over 10 years, Walmart has asked Chinese manufacturers not to attach price tags to Christmas ornaments, signaling deep uncertainty about future prices.
Suppliers in Uncertainty
In a factory in China’s Zhejiang province that produces Christmas ornaments for Walmart, adding price stickers before shipping goods to the US has always been standard practice. Now, Walmart has asked the factory to skip this step, according to Barry Shan, vice president of the supplier from Ningbo city.
Paralysis of Trade Relations
American retailers are suspending orders as the global supply chain has nearly ground to a halt. Although Trump announced a 90-day pause before tariffs take effect, with duties rising to 125% on Chinese exports, companies have little idea which strategy to adopt.
Specific Impacts on Retailers
Kohl’s placed orders for fashion accessories with a Chinese supplier last week but has now requested production be suspended, despite raw materials already being prepared. “There’s no longer a commercial decision that can fix it,” said Zheng Tao, a Shanghai-based exporter of car parts.
Historically High Tariffs
With Trump’s reciprocal tariffs, import duties for China were at 54% and are set to rise further to 125%. The highest US tariffs in more than 100 years will virtually guarantee:
- Shortages of goods in American stores
- Significantly higher prices for American consumers
- Disruption of long-term supply relationships
- Uncertainty in inventory planning for the holiday season
- Rising inflationary pressures in the retail sector
Finding Alternatives Complicated
Trade paralysis is compounded by uncertainty about moving production to other countries, as Trump’s tariffs affect other US trading partners as well. A Kohl’s supplier connected with a Cambodian factory but canceled the shipment after Trump’s 49% duty on Cambodia.
“Now you know that any country could be a US target for rising tariffs, we feel helpless,” said Frank Deng, manager of a Shanghai-based home appliance exporter.
Long-term Skepticism
“Suppliers don’t believe these tariffs will be here in the five-to-ten-year horizon we need to move production to the US,” said Cameron Johnson from consulting firm Tidalwave Solutions. “And meanwhile, we don’t believe our customer will pay these prices.”
