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Walmart, Dollar Tree Step Up Pressure On Chinese Suppliers

US Retailers Pressure Chinese Suppliers

The impacts of ongoing trade disputes between the U.S. and China are beginning to be felt by suppliers, according to Wall Street Journal reports on Wednesday (Nov. 28).

Walmart, Amazon and Home Depot have all introduced new efforts to put the pressure on their Chinese suppliers, including cutting orders or negotiating lower prices. Walmart and Home Depot have reportedly advanced some of their planned purchases to accelerate their supply chains with Chinese vendors, according to a Walmart spokesperson and comments made during Home Depot’s latest earnings call, The WSJ said.

Amazon, meanwhile, has cut back some of its orders for certain private-label products, one unnamed source said, noting that the eCommerce giant can no longer make a profit on some of these products as a result of trade tariffs.

Dollar Tree and Target have taken similar measures as a result of trade disputes. Reports said Dollar Tree provided an email statement confirming renegotiations with its vendors, as well as cancelled orders and adjusted product lineups. Target emailed reporters saying it has “many levers” to remain competitive on price, but did not offer more details.

Chinese manufacturers have confirmed some of the pressures resulting from trade disputes with the U.S., with reports saying some suppliers are working to find new customers outside of the country. Others have offered discounts to maintain their orders.

China reported an increase in trade outflows to the U.S. last month, but local manufacturers say it’s a result of U.S. corporate buyers “front-loading” on their orders in preparation for more tariff increases in January.

The vendor squeeze comes as U.S. President Donald Trump and China President Xi Jinping are scheduled to discuss trade at the G-20 summit this week in Brazil.

The U.S. imposed import taxes of 20 percent on $200 billion worth of Chinese goods, which took effect last month. Those levies are expected to increase to 25 percent beginning next year, according to reports, with Trump threatening to expand tariffs to even more products, including iPhones.

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