Every piece of the retail supply chain ultimately has to bow to trade policies and tariffs enacted by overseeing governments. On this episode of Point of Sale, host Andrew Cox explores the ins and outs of U.S. policy with retail analyst, Forbes contributor and former American Apparel & Footwear Association President Rick Helfenbein.
The Trump administration put several policies into place that severely impacted the retail industry. One of the earliest was the Chinese 301 tariffs, which were meant to rebalance trans-Pacific trade, and Helfenbein said the retail world was OK with the tariffs as long as they stayed away from consumable goods.
The first two phases of tariffs left retail alone, but phases three and four took aim at consumables like apparel and footwear. And China did not live up to its side of the bargain and purchase as many goods as it promised it would.
In one of his last acts as sitting president, Trump put limitations on importing cotton and tomatoes from one Chinese province, which put stress on U.S. importers to defend where imported goods were coming from.
Helfenbein said it will be interesting to see going forward what import limitations become law because those regulations will force people to “rearrange how they source goods because it will be very, very difficult to prove innocence even though as an importer you think you’re totally innocent.”
Those difficulties come because importers have no physical evidence, like soil samples, to prove where goods come from. The Xinjiang province limitations are especially stressful on the apparel industry because “20% of the world’s cotton comes from that region,” said Helfenbein.
On the regulatory side, Helfenbein said there needs to be a balance between agencies having tough regulations and retailers/importers having the flexibility to negotiate situations when things go awry.
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