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Retailers Must Diversify to Overcome Tariff Tensions

Writing for the National Retail Federation (NRF)’s blog, president and CEO Matthew Shay reflected on the effects recent tariff escalations between the U.S. and China have taken on retail supply chains. Review some of his takeaways here.

Retailers can’t move everything from China.
In response to tariffs, many retailers have sought supply chains outside China. Shay writes that alone won’t be enough to overcome supply chain disruption.

“There simply isn’t another nation that duplicates what is available in China,” he says. He credits Chinese infrastructure, workers’ product knowledge and quality control as factors that place China as one of the world’s leading manufacturing nations.

It takes more than time to rebuild a supply chain.
Shay says even if businesses wanted to use supply chains outside China, establishing them would take years and present major logistical hurdles. Beyond the time commitment, Shay says placing trust in shipping reliability and product quality in a new supply chain would be a tall order for many vendors.

The U.S. and China need to resolve the issues.
Shay says the NRF supports the U.S.’s stance on the lack of intellectual property protections and other issues, but “the overwhelming sentiment is that tariffs are not the right approach.” Shay believes the U.S. cannot afford to walk away from a valuable trade partner like China.

How are you responding to price increases due to tariffs?

tariffs

About Todd Taber

Todd Taber
Todd is trends editor for Hardware Retailing magazine. He graduated from Indiana University where he majored in journalism and French. Throughout his career, he has aimed to highlight small businesses and their community value. He joined NRHA in 2017.

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