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American companies rush to negotiate the price reductions of Chinese suppliers, move production and increase the prices of American consumers while managers present themselves with the additional 20% tariffs of President Donald Trump on Chinese products and prepare for more.
Trump campaigned on a promise of 60% of rights to Chinese products, and the White House could impose additional imports on imports from China on April 2, when it reveals the “reciprocal rates” to countries around the world.
We do not know how much the prices could go, but American and Chinese companies are looking for bypass solutions and rethink their supply chains to reduce dependence on China.
“Obtaining concessions on the costs of our suppliers” was at the top of the list, said this month Jeff Howie, financial director, the home furniture retailer Williams-Sonoma.
Howie said the company would continue to move the supply to China, after having reduced Chinese manufacturing goods by 50% of stocks in 2018 to 23%. He said they would also expand production in the United States and “transmit target price increases to our customers.”
The owner of Pottery Barn is one of the many American retailers. Costco and Walmart have already required supplier price reductions, the latter have been transported by the Chinese authorities to explain their reflection.
Applications for price reductions, as well as movements to move production elsewhere, emphasize how large companies have built greater resilience and flexibility in their supply chains after Trump’s First Trade War and the Pandemic COVID-19.
The American and Chinese companies said that the last rates had accelerated a production campaign of production that started during Trump’s first term.
“The series of 2017 prices has certainly created an action, and we are in a different position from that of the time,” said the Financial Times Richard McPhail, financial director of the home improvement.
Home Depot chief Ted Decker added that many of his suppliers have changed the manufacturing of China in the past seven years. About a third went to Southeast Asia, a third in Mexico and a third in the United States, he said.
Elegant home-tech, a Chinese manufacturer who ships vinyl floor coverings in the United States, including in Home Depot warehouses, began to build a factory in Mexico in 2023 after Trump’s first price fight.
The $ 60 million factory will start to send floor coverings to the United States this summer, said a director of the company, asking not to be appointed. The group hopes that it will not be taken in the cross -fires of American trade tensions.
“Everything is uncertain,” said the director. “This is difficult for manufacturers, importers and retailers.”
Elegant Home-Tech is in negotiations with its customers on how to share the additional price load, which is now 50%. This includes 25% of Trump’s first mandate and the normal rate of 5%.
“Our profit is very tiny,” said the director. “It is impossible for us to allow us all pricing costs. We will probably divide the costs. We think the [in-store] The price will also increase.
The Chinese petal petpal food manufacturer Petpal Pet Nutrition told investors that its factories in Vietnam and Cambodia “could now fully take orders from American customers” and were not “affected by prices”.
Likewise, the Chinese tool manufacturer fed by Battery Globe said that “its Vietnam factory had mainly reached complete export coverage to the United States”.
The problem for companies that change production elsewhere is that they are not sure to know who will be struck by prices afterwards. Trump said the only infallible way to avoid prices was to move production in the United States.
“No one knows what prices will be put, where, when or what,” said Jay Schottenstein, managing director of the American Eagle clothing brand. “We do not know what will be in Vietnam, we do not know China, we do not know India. We do not know Bangladesh.”
“We are not going to jump everywhere until we know exactly what history is,” he told analysts.
However, the leaders of American Eagle said that they had already spent months preparing and planned to reduce the supply in China, from the current percentage of “high adolescents” to “figures” by the second semester.
For retailers, in particular those who depend strongly on Chinese manufacturing, the effects will be more damaging.
The retailer at a reduced price below, which supplies around 60% of its products from China, expects a percentage point reaches its gross margin for the year despite its best efforts to mitigate the impact.
Kristy Chipman, the Five Finance Manager below, told analysts that the group sought to renegotiate prices with suppliers, to move production and increase certain prices in stores.
“The scale and extent of the recently announced prices are important,” she said.
Additional report by Nian Liu and Wenjie Ding in Beijing and Thomas Hale in Shanghai
