China promises retaliation to US tariffs
“If the United States insists on imposing another round of tariffs on Chinese products, China will definitely take countermeasures to safeguard its legitimate rights and interests,” foreign ministry spokesman Geng Shuang said, according to ABC News.
Geng did not detail the countermeasures, but the government has threatened “comprehensive measures” before – signalling that it may be considering economic regulation to disrupt the operations of American companies on Chinese soil as it runs out of imports for penalties.
Trump told reporters on Air Force One that he had a further US$267 billion worth of tariffs ready to go on short notice if he wants – on top of the US$200 billion about to take effect.
According to GlobalRetail Data managing director Neil Saunders, this latest round of tariffs extend into a vast array of consumer goods.
“Many retailers will now be faced with a difficult choice of whether to pass the cost increases across to consumers or to take a hit on their margins,” Saunders said.
“The exact response will vary from retailer to retailer but, in our view, both strategies are likely to be used.”
The cost increases may come amidst a slew of other cost increases for retailers, including increases spending on technology, elevated logistics costs, higher petrol prices, rising labor expenses and rising rent and electricity.
He noted the possibility of retailers shifting production in order to combat the cost increases, but given the extensive manufacturing capacity in China as well as the difficulties in quickly shifting supply chains, this option is unlikely to be a quick fix.
Trump’s ultimate goal is to have US businesses make their goods on home soil, but as analyst Tim Bajarin told the AFR, tariffs will likely only result in more expensive goods for consumers.