British retailers are exploring ways to fight President Trump’s tariffs, including ceasing exports or looking at setting up US subsidiaries.
Trump has imposed an additional 10% tariff on Chinese-made goods and has axed – then reinstated – the “de minimis” rule that allows goods under $800 (£645) to be imported without import duty.
The loophole is often used by the likes of Shein and Temu, Chinese-based marketplaces that sell goods at a very low price.
The reversal of the de minimis policy came on Friday night after packages piled up at the border and the US Postal Service was unable to check the roughly 1 billion parcels under this rule that enter the US every year.
The Times reported that Next is understood to be considering setting up a US corporate arm to “mitigate the impact” of tariffs.
Shipping orders to a US subsidiary would make retailers responsible for tariffs only on the cost price of goods instead of the selling price – but this is challenging for smaller businesses.
Superdry has also stopped shipping China-made products directly to customers in the US so it does not have to pay the 10% tariff.
Superdry chief executive Julian Dunkerton said: “[Tariffs] just makes them unprofitable. We are also worried about shipments with products of mixed origins — like some being from China and some from Turkey. It just becomes a horrible mess.
“It adds complexity that wasn’t there before but we will get to a solution.”
A source at another retailer said it had “turned off” its website during the confusion of the rules, while a sportswear retailer said US wholesalers were nervous about taking orders as they are worried about products being taxed and margins being affected.
“Everything is taking longer and the general sense of uncertainty is hurting everyone… it’s making it harder to do business out there,” they said.
No comments yet