Retail

Macy’s, JCPenney Push Back Against 25 Pct Tariffs

Macy's, JCPenney Push Back Against Tariffs

Letters filed by department store retailers Macy’s and JCPenney, along with other companies, asked the U.S. Trade Representative to remove many footwear and apparel items from an expansive list of products set for the new 25 percent tariffs, Retail Dive reported.

The tariffs that have been put forward would negatively impact JCPenney’s core customers, per an attorney for the retailer. That audience includes middle-class females who buy products for their families and have a household income that is “marginally” more than the median in the United States. At the same time, the merchants noted that tariffs for footwear and apparel are high compared to other items, and that the new tariffs would fall on consumers in the United States.

Macy’s and JCPenney also noted that it is not easy to move supply chains away from manufacturers in China, with only 2 percent of shoes sold in the U.S. created in the country.

In addition, the escalating United States-China trade war could cause many Amazon merchants scrambling to keep their businesses. Those retailers operate on a model of purchasing inexpensive goods in China and selling them for a higher price in the United States. They are now faced with the decision of whether to place factory orders and determine pricing in time for the holiday shopping season.

Potential tariffs would impact retailers of all sizes, but these merchants lack negotiating power to transfer the tariff costs to their suppliers. U.C. San Diego Supply Chain Management Institute Managing Director Joel Sutherland said, according to Bloomberg earlier this month, “The smaller companies have a significant problem. We have an administration that says one thing today and does something else tomorrow, which poses tremendous risks.”

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