 |
|
|
|||||
A sweeping new U.S. tariff on products made in China is expected to increase the prices American consumers pay for a wide array of products, from the ultra-cheap apparel sold on online shopping platforms to toys and electronic devices such as computers and cellphones.An additional 10% tariff on all Chinese goods took effect Tuesday, while the U.S. Postal Service announced it will stop accepting parcels inbound from China and Hong Kong until further notice.The previous day, President Donald Trump agreed to pause his threatened tariffs against Mexico and Canada for 30 days following negotiations on Trump’s demands for the North American nations to take steps to reduce illegal immigration and the flow of drugs such as fentanyl into the U.S.After failing to get a similar White House reprieve, China struck back with retaliatory tariffs on some U.S. goods that are set to begin next week.The sheer volume and variety of the China-made merchandise sold in the U.S. means residents would probably see the prices of many typically inexpensive items tick higher if the tit-for-tat tariffs persist.These are some of the products most likely to be impacted: Electronics, home supplies and car parts The U.S. imported about $427 billion worth of goods from China in 2023, the most recent year with complete data, according to the U.S. Census Bureau. Consumer electronics, including cellphones, computers and other tech accessories, make up the biggest import categories.China is a dominant production engine for tech gear, including for American companies like Apple that have their products assembled in the country. In 2023, China accounted for 78% of U.S. smartphone imports and 79% of laptop and tablet imports, the Consumer Technology Association trade group reported.The tariffs also may affect how much consumers pay for typically inexpensive clothing, shoes and kitchen items like pots and pans, as well as the big-ticket items, such as appliances, furniture and auto parts.Jay Salaytah, 43, who runs his own auto repair shop in Detroit, said he bought some pieces of equipment sooner than he might have, anticipating they would cost more if Trump implemented his campaign promise to use import tariffs as a tool to promote U.S. manufacturing.“I knew the costs were going to go up, and these are manufactured in China,” Salaytah said of a probe test light he purchased before Tuesday’s tariff went into effect. Low-cost apparel and accessories In addition to imposing a new tariff on Chinese imports, Trump’s executive order also suspended a little-known trade exemption that allowed goods worth less than $800 to come into the U.S. duty-free. The order left open the possibility for the loophole to still be used with shipments from other countries.The trade rule, known as “de minimis,” has existed for nearly a century. It came under greater scrutiny in recent years due to the rapidly growing number of low-cost items coming into the U.S. from China, mainly from prominent China-founded online retailers such as Shein, Temu and Alibaba’s AliExpress.Former President Joe Biden’s administration proposed a crackdown on the loophole in September, but the rules did not take effect before Biden left office.Shein and Temu have gained global popularity by offering a quickly updated assortment of ultra-inexpensive clothes, accessories, gifts and gadgets shipped mostly from China, allowing the two e-commerce companies to compete on the home turf of American companies.Seattle-based Amazon is trying to compete with them through an online storefront that mimics their business model by offering cheap products shipped directly from China.Chinese exports of low-value packages soared to $66 billion in 2023, up from $5.3 billion in 2018, according to report released last week by the Congressional Research Service. In the U.S., Temu and Shein comprise about 17% of the discount market for fast fashion, toys and other consumer goods, the report said. How much will prices go up? It’s unclear. Under de minimis, Shein, Temu and AliExpress could bypass taxes collected by customs authorities. But under the changes effective Tuesday, company shipments from China will now be subject to existing duties plus the new 10% tariff imposed by Trump, analysts said.“The vast majority of these orders are valued less than $800, which means all or virtually all of them are going to get caught in that,” Youssef Squali, an analyst at Truist Financial, said.Juozas Kaziukenas, founder of e-commerce intelligence firm Marketplace Pulse, said he thinks the price increases on platforms like Shein and Temu will be “pretty small” and the products they sell will remain cheap. However, the rule change is likely to result in delivery delays since the packages now have to go through customs, Kaziukenas said.The new tariffs will also hit third-party sellers on Amazon that import products from China, according to Squali. He expects sellers to eat some of the costs and pass the rest onto customers, which he thinks could result in percentage price increases in the mid-single digits. Other e-commerce sites that host businesses, such as Etsy, are also going to be impacted, Squali said.Temu, which is owned by China’s PDD Holdings, has previously said its growth did not depend on the de minimis policy. Though most of its products are shipped from China, Temu has been recruiting Chinese merchants to store inventory in the U.S., a move that experts said would allow it to not be as exposed to changes around the trade rule.In January, China also introduced measures to help cross-border e-commerce build overseas warehousing by offering them tax rebates or tax exemptions What are US retailers saying? The day after November’s U.S. presidential election, Brieane Olson, CEO of teen clothing chain PacSun, went to Hong Kong to meet with factory executives to figure out ways to prepare for Trump’s tariff plan.Roughly 35% to 40% of PacSun’s garments are made in China, even as the chain has accelerated moves to diversify with suppliers in countries like Cambodia and Vietnam.But Olson said Trump’s 10% tariff on Chinese goods was less extreme than the company anticipated. For now, PacSun doesn’t plan to increase prices on its products or move its manufacturing of knitwear and denim out of China.Toys are another category of consumer products that relies heavily on imports from China. Greg Ahearn, the president and CEO of The Toy Association trade group, said he thinks toy companies that source in China are going to absorb the cost of the new tariff in the short term.Eventually, those price hikes will be moved onto the consumer, Ahearn said. Associated Press writers Anne D’Innocenzio in New York, and Christopher Rugaber and Didi Tang in Washington contributed to this report. Haleluya Hadero, Associated Press
Category:
E-Commerce
In the first weeks of Donald Trumps second term in office, Elon Musk has been busy seizing control of instruments of government power, causing many to wonder who is really in charge. Elon Musk is President, The Atlantics Jonathan Lemire declared. There has never been a private citizen like him. Newly confirmed Treasury Secretary Scott Bessent recently granted Musks Department of Government Efficiency (DOGE) access to a highly sensitive computer systemdescribed as a a checkbook for the entire federal governmentthat distributes trillions of dollars annually. Musk, flanked by a cadre of young engineers with no government experience, as Wired has reported, are hacking away at sensitive federal systems likely without proper security clearance. Naturally, Musk and his ragtag child army have raised bright red flags around Washington. So many of these things are so wildly illegal that I think theyre playing a quantity game and assuming the system cant react to all this illegality at once, Georgetown Law professor David Super told the Washington Post in response to Musks blitz on the federal government. Democratic Senators Elizabeth Warren and Ron Wyden asked the Government Accountability Office on Tuesday to open an inquiry into Bessents granting DOGE access to the Treasury payment system. In a separate letter sent to Bessent last week, Wyden wrote, I can think of no good reason why political operators who have demonstrated a blatant disregard for the law would need access to these sensitive, mission-critical systems. But Wydens concern also highlighted another major conflict of interest that makes Musks powers worrying: his ties to China. I am concerned Musks enormous business operations in Chinaa country whose intelligence agencies have stolen vast amounts of sensitive data about Americans, including U.S. government employee data by hacking U.S. government systemsendangers U.S. cybersecurity and creates conflicts of interest that make his access to these systems a national security risk, he wrote. Wyden cited a recent Chinese breach of the Treasury Departments systems in which hackers accessed former Secretary Janet Yellens emails. While most American companies do notor cannotoperate in China, Musks Tesla certainly does. In 2024, the electric carmaker sold 657,000 cars in China, up 8.8% from the year before. It also operates massive car and battery manufacturing facilities in Shanghai. The company received several unusual concessions from the Chinese government, Wyden noted, letting Tesla operate independently without a joint venture with a Chinese partner, favorable loans, and a discounted corporate tax rate of 15% in China, something that could change quickly if Musk were to anger the Chinese government. In January, Chinese Vice President Han Zheng met with Musk, urging Tesla and other U.S. companies to seize the opportunity and share in the fruits of China’s development. Musk vowed to deepen investment cooperation with China. And with Musk helming the dissolution of the U.S. Agency for International Development (USAID), the agency in charge of foreign aid and assistance, critics have warned that Americas retreat could create pathways for China to expand its influence abroad. The Trump administration has just put America last, while handing a gift to our biggest adversaries, notably China, Michael Schiffer, former USAID assistant administrator in Asia, wrote in Just Security. Americas alliances will suffer. U.S. partners will be at risk. And Americas enemies will rejoice. With the U.S. and China on the brink of exacerbating its ongoing trade war, the man running behind the scenes and fiddling with the bells, knobs, and whistles of the U.S. government has no electoral mandate, no real position, no proper security clearance, and deep conflicts of interest with his business. What could go wrong?
Category:
E-Commerce
Amid higher costs, longer wait times, and waning sales, Starbucks is ready for a brand refresh. The companys new CEO, Brian Niccol joins Rapid Response to reveal how Starbucks plans to go back to its roots prioritizing human connection and a local coffeehouse feel in the hopes of restoring the brands position in U.S. culture. Also, Niccol gives an inside look at the companys subtle name change, which aligns with this new strategy. This is an abridged transcript of an interview from Rapid Response, hosted by the former editor-in-chief of Fast Company Bob Safian. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with todays top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode. You’ve called your strategy ‘Back to Starbucks,’ and it’s included the return of a condiment station, the return of handwritten names on cups. It can sound like a lot of small details. Is that all that’s requiredtuning the details? Look, I mean, we are in the retail business. We’re in the customer service business, and anybody that’s been involved with that knows the details do matter. And the reason why the details you just mentioned really matter for Starbucks is, frankly, those details are our point of difference. It’s how we get to another level of connection. It’s also how we kind of create a little bit of the magic, right? What turns the coffee and that craft beverage into something really special is the moment that potentially you have in our store, the community of the store, the moment you might have with our barista, or just the moment where you grab your cup and unexpectedly there’s a little smiley face on your cup. And it just changes the entire attitude of the customer. Obviously, you have to have a great product, you have to have a great experience, but if you have those little moments of connection, it just adds so much more. Well, it’s always interesting how, in food-related businesses, the product has to be satisfying, but so much of it is about the experience, about getting the experience to feel memorable and satisfying. Yeah, that’s right. And look, I think one of the things that veered Starbucks a little bit off was the whole mobile ordering, the COVID situation. I think it just really took a lot of the soul out of what this business is all about. And I’m sure, Bob, like me, you remember when the first Starbucks came to the neighborhood, and it was a moment for the neighborhood, right? I was living in Cincinnati, Ohio. I was working at Procter & Gamble at the time, and we were like, what a great spot. I really loved it when they were like, all right, Brian, grande Americano with an extra shot. And I’m like, yeah, all right, that’s me. I’m in. So, I think just what happened with mobile ordering is it kind of chipped away at a little bit of that soul and that connection because we went to labels and we stopped writing on the cups and we started looking at how you can remove seconds from the proposition as opposed to how you maintain the experience, the connection, and the integrity of what goes even beyond a great cup of coffee. There is this kind of impression that there was an earlier Starbucks heyday, but it’s not like the stock is that far from its all-time high. So, when you think of the life cycle of the company, what phase do you feel like it’s in? Or do you see phases ahead? Right now, the phase we’re in is we need to get things turned around, at least in the U.S. business. We need to get what I would call the soul of the business back, this connection back, and the partner experience back so that the customer feels the brand again, okay? And I think when we get that back, there’s tremendous growth ahead of us because, frankly, the reality is so many things isolate you as opposed to bringing you together. And I think people want to get out of the loneliness phase and get back to the connection phase. I’ve had the opportunity to travel around the world, and it’s true everywhere I’ve been, whether it was Italy, which was a little bit surreal because the whole Starbucks original idea came from Howard visiting Italy. Here I am back in Milan, seeing people walk around with Starbucks cups. And it just demonstrates this is one of those human truths that just connects people all around the world, connecting over a cup of coffee or connecting with your barista. It’s just a human truth. You mentioned Howard Schultz, the founder and multiple-time CEO there. Do you talk with him about what you’re doing, or are you kind of on your own? Howard’s been great. I think I’m fortunate that you still have a founder who can share the history of how Starbucks went from one store in Seattle to the iconic global brand it is. He doesn’t want to run the company. He doesn’t want to be involved in the day-to-day. He wants you to do that. But he’s available for me to inquire about his thinking when you introduced food into the cafe and how it competed with coffee, and ‘what was your thinking when we went from hot to cold,’ and it’s great to get that insight. During Starbucks’ life, there’s been an increasing proliferation of neighborhood coffeehouses. How much do you think about these hyper-local cafes as your competition? I was watching your new commercial, “That’s not my name.” And it ends with a tweaked name for you guys, a Starbucks Coffee Company, which sounds a little more local. Is that what you’re trying to signify? The reality is, Starbucks started as a coffee company, and at the heart, that’s what we are. Again, I went back and did a little history lesson, and when Starbucks first started, it had a very simple statement to be the purveyor of the finest coffee in the world. And we still believe that in a really big way. So I think it’s important to make that statement that we are the Starbucks Coffee Company. And what I want people to understand is we are so committed to coffee quality that we apply that same commitment of quality and craft to the food we do, the teas we might provide, but first and foremost, we’re a coffee company. And I think it’s important for people to be reintroduced to Starbucks from that point of view because I think we’ve forgotten to tell people that over the last, let’s call it last decade. I mean, it sounds like you need to focus more. Now you need to narrow down a little bit what you’re doing, get a little more streamlined. And then maybe once that is ligned, you could start adding things back again or adding new things. We’re going to continue to be an innovative company, but you’re best served to innovate when your core is strong. If you are innovating to try and compensate for a weak core, usually good things don’t happen. You end up just drifting. And my point is let’s have a strong, healthy core, and then we can innovate from there.
Category:
E-Commerce
All news |
||||||||||||||||||
|
||||||||||||||||||