2018 could be last truly cheap Black Friday due to Trump trade war


Donald Trump shopping cart grocery store
President
Donald Trump pushes a shopping cart at a food distribution center
in December 2017.

AP Photo/Evan
Vucci


  • Black Friday 2018 could be the last truly cheap Black
    Friday due to incoming tariffs from Donald Trump’s trade war
    with China.
  • 2018 has not seen widespread increases because the
    tariffs are not all in place yet, and take time to filter down
    to consumers.
  • By this time next year, the full effects are likely to
    be felt.
  • “It’s almost like this year and next year are two
    different worlds,” one retail head said.
  • Major outlets have said publicly that their prices are
    likely to go up soon.

This year could be the last truly cheap Black Friday, thanks to
expected price increases resulting from President Donald Trump’s
trade war with China. 


Increased tariffs on Chinese goods
, imposed by Trump, have so
far been widely felt by the typical consumer, and this Black
Friday has
seen another onslaught of deals
.

However, by this time next year, the consequences of measure
including a 25% tariff on billions worth of Chinese goods
will have made their way to store shelves, and hamper retailers’
ability to offer rock-bottom prices.

Christopher Shaker, a consumer products analyst and partner
at consulting firm RSM, told
CNN Business
: “Once you get to that 25% mark, that’s when
you’re going to see more price increases for the end
consumer.”

Read more: 

These
are the stores with the best Black Friday discounts

Major outlets like
Costco, Walmart, GAP, Coca-Cola, and General Motors

have commented publicly on the tariffs
, and said they either
plan to increase prices to cope, or are already doing so.


Macy's Black Friday
Shoppers
at Macy’s shop on Thanksgiving Day in search of early Black
Friday deals.

Charles Sykes/AP Images
for Macy’s


Billions worth of Chinese goods, including handbags,
wallets, and perfumes, have been subject to a 10% tariff since
September, which is due to increase to 25% in January
2019.

But this hasn’t had a big effect on consumers this year, as
many of the items were priced before the tariffs came into
effect, Rick Helfenbein, president of the American Apparel and
Footwear Association, told CNN Business.

Therefore two upward pressures will hit at once in 2019:
prices will catch up with the 10% tariff, and then be clobbered
again by the hike to 25%.


Black Friday Best Buy
Shoppers
at a Best Buy store look for Black Friday
deals.

Kamil Krzaczynski/Getty
Images


“It’s almost like this year and next year are two different
worlds,” Helfenbein said.

Read more: These
popular brands say Trump’s tariffs are forcing them to raise
prices

“Shoppers may be pardoned this Thanksgiving season, but they’ll
be paying more come spring,” he added.

Retailers are warning that this will be the case.

JCPenney counsel David M. Spooner wrote a letter
to US Trade Representative Robert Lighthizer in September
warning that “No retailer will be able to simply absorb
the cost of a 10% percent tariff, much less a 25% tariff in
today’s ultracompetitive retail environment. That means
consumers will pay higher prices.”

Matthew Shay, president and CEO of the National Retail
Federation
said in September,
“with these latest tariffs, many
hardworking Americans will soon wonder why their shopping bills
are higher and their budgets feel stretched.”

Trump will meet with Chinese President  Xi Jinping at
the G20 Summit in Buenos Aires, Argentina, next week, and some
hope that a dialling-down of the trade war could follow.

But Chinese trade negotiators canceled
preliminary meetings with the US
this week.

Around the same time, the Trump administration
released a report
which said that Beijing has done little to
placate the US.

Commerce Secretary
Wilbur Ross defended the 10% tariffs in September
, saying
that consumers would not notice the increase.

The White House has appeared unsympathetic to companies
likely to hike prices on Chinese imports. When it seemed as if
Apple may be affected, even though some
products have since been spared from tariffs
, he tweeted
saying: “Apple prices may increase because of the massive Tariffs
we may be imposing on China – but there is an easy solution where
there would be ZERO tax, and indeed a tax incentive.

“Make your products in the United States instead of China.
Start building new plants now. Exciting!”

Business Insider has contacted the White House for
comment.

Source link

more recommended stories