[ad_1]
Another wave of pricing is imminent, and the timing "could not be worse for retailers," according to a Bank of America badyst Merrill Lynch.
Asset announced on Twitter that on September 1, the United States will apply an additional tariff of 10% on the remaining $ 300 billion of goods from China. The president then added that the new rights would not include the $ 250 billion of items already priced at 25%.
Lorraine Hutchinson, an badyst at Bank of America, told investors that although retailers are rapidly relocating Chinese production to other parts of Southeast Asia over the past decade, only 16 % of production remains in China.
"The problem is that capacity is limited in these areas and the time available for [retailers] move. Given the critical importance of the fourth quarter for retail, this calendar could not be worse for retailers. They can not move fast enough to move production. The goods are coming soon for the holiday season, "Hutchinson told The Final Round.
The retail sector did not hesitate to inform the President of the negative impact of tariffs on US retailers.
Hutchison said she thought the hardest-hit retailers would be those with the highest exposure in China, with the lowest pricing power to offset the impact of tariffs such as Chico's (CHS), American Eagle (AEO) and Abercrombie & Fitch (ANF).
However, Hutchison stated that non-price retailers such as TJ Maxx (TJX), Burlington (BURL) and Ross Stores (ROST) would not be as affected and "could even benefit [from tariffs], which they usually do disruptions of the supply chain in the industry. "
"The worst of cases [for the retail sector] does Trump move that number up to 25%. And in this scenario, without price increases from retailers, we are actually seeing a 33% profit for the US retail business, "said Hutchinson.
Sara Dramer is an badociate producer at Yahoo Finance. Follow her on Twitter @saradramer
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, Youtube, and reddit.
[ad_2]
Source link
