The U.S.-China trade battle could be coming to a mall near you in the form of higher prices in time for the back-to-school and holiday shopping seasons.
Shoppers look at toys in a Walmart store in Houston last November. Toys imported from China could be among the consumer goods rising in price if President Trump’s latest proposed tariffs take effect.
Wall Street is waiting to see if Target Corp., J.C. Penney Co. and Kohl’s Corp. also warn of higher prices when they report their quarterly results this week. It’s unclear which types of goods would increase most in price, as retailers typically shy away from discussing specific pricing strategies in advance.
For instance, China makes nearly 85% of the $27 billion worth of toys sold in the United States each year, according to“If prices go up it’s going to dampen sales, there’s no question about it,” Toy Assn. President Steve Pasierb said. “And we’re an industry still recovering from the loss of Toys R Us,” the retailer that liquidated last year, he said.
They can absorb the higher tariffs in hopes of keeping prices stable and not losing sales, but that eats into profits. Conversely, they could raise consumer prices to protect profits and risk a falloff in demand for their goods. For many retailers, it’s likely to be a combination of both, experts said.
The United States and China have been negotiating a new trade pact, and Trump has said he’s made no decision yet on whether to implement the new tariffs.
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