As the market prospects continue to be complicated by macro factors, the National Retail Federation expressed disappointment in the position on China tariffs just detailed by the Biden Administration.
In remarks, United States Trade Representative Katherine Tai, speaking at the Center for Strategic and International Studies on October 4, characterized China’s lack of adherence to global trading norms as undercutting the prosperity of Americans and others around the world. She said the Biden Administration has conducted a comprehensive review of U.S.-China trade relations and determined to begin a targeted tariff program as well as take measures aimed at addressing China’s subsidizing industries operating within the country.
With no prospect of the administration cutting tariffs expressed, NRF responded to Tai’s remarks by noting that many American businesses had actually been hurt by tariffs that were supposed to penalize China.
On October 4, David French, NRF svp/government relations stated:
“American businesses across the country continue to be severely impacted by the tariffs put into place by the previous administration. Today’s long-awaited announcement proved the Biden administration’s trade strategy on China to be lackluster at most, and will further inflict unnecessary damage to the American economy and retail supply chains. The continuation of these harmful tariffs worsens the challenges thousands of retailers must navigate, especially at a time when many are only beginning to emerge from the serious economic damage they have suffered as a result of the global pandemic. Because these tariffs touch products in nearly every sector of the U.S. economy, they also ultimately force consumers to pay higher prices. It is critical the administration initiate immediate discussions with China so we can level the international playing field and bring an end to the global supply chain disruption.”
The declaration that tariffs will remain part of the Administration’s policy was more unwelcome news on the retail front despite what has been a robust business environment. In a holiday season complicated by labor, logistical and larger trade challenges, despite strong consumer spending through the summer, NRF responded on October 3 to concern about year-end spending in the face of sliding consumer confidence numbers.
Despite falling consumer confidence numbers amid the recent rise in COVID-19 infections, NRF pointed out, shoppers are continuing to spend.
NRF Chief Economist Jack Kleinhenz said, “With consumer spending accounting for roughly two-thirds of U.S. gross domestic product, all eyes are closely watching shoppers’ ability to drive the economy. If consumer finances are any indication, there’s reason to be optimistic: Households remain in good shape, with consumers in the aggregate actually underspending relative to current income. Even though enhanced unemployment benefits have expired and are no longer providing a boost to personal income, the loss is easily offset by the savings stockpiled since the coronavirus pandemic began.”
The Conference Board Consumer Confidence Index declined in September, following decreases in July and August. The Index stands at 109.3, still in the plus-100 growth range, but down from 115.2 in August. The Present Situation Index, based on consumer assessment of current business and labor market conditions, slipped to 143.4 from 148.9 in the month earlier. The Expectations Index, based on consumer short-term outlook for income, business, and labor market conditions, slid to 86.6 from 92.8 in the previous month.