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QINGDAO TODAY
在线翻译:
szdaily -> World Economy -> 
Facing Trump’s tariffs, some firms move, change or wait
    2019-07-23  08:53    Shenzhen Daily

SOME are moving factories out of China. Others are strategically redesigning products. Some are seeking loopholes in trade law or even mislabeling where their goods originate — all with the goal of evading U.S. President Donald Trump’s sweeping tariffs on goods from China.

But most of the U.S. companies that stand to be hurt by Trump’s tariffs are hunkering down and waiting — waiting because they don’t know when, whether or how his yearlong trade war with China will end or which other countries the president might target next.

Consider Xcel Brands, a New York-based company that owns such brands as Halston, Isaac Mizrahi and C. Wonder. Two years ago, it made all its clothing in China. Now it’s on the move — diversifying production to Vietnam, Cambodia, Bangladesh and Canada and considering Mexico and Central America as well. By next year, it expects to have left China completely.

“You have to keep moving things around,” said CEO Robert D’Loren.

Trump launched the world’s biggest trade war since the 1930s by imposing tariffs on US$250 billion in Chinese goods and threatening to tax US$300 billion more. He has pursued separate battles with America’s allies, too — from South Korea, Mexico and Canada to Japan and the European Union — over trade in steel, aluminum and autos.

“The president has managed to pick a fight with all of our trading partners,” said Rick Helfenbein, CEO of the American Apparel & Footwear Association trade group.

Faced with the prospect of a forever war with America’s trading partners, numerous businesses say they’re delaying investment decisions and reviewing their business relationships until they have a clearer view of how Trump’s trade wars might end — if they will.

The paralysis itself is inflicting its own damage worldwide. Foreign direct investment, including cross-border mergers and new factories, fell in 2018 for a third straight year to its lowest point since the recession year of 2009, the United Nations reports. The International Monetary Fund expects world trade to slow in 2019 for a second straight year.

Companies that depend on targeted imports face an agonizing decision: Can they press their foreign suppliers to cut their prices? Could they absorb the higher costs themselves? Or should they pass them on to their customers in the form of price increases — and risk losing business?

Most companies weren’t prepared for the trade disruptions. For decades, most major countries, far from erecting trade barriers, tore them down. Some companies weren’t even set up internally to analyze tariffs and calculate how to minimize the impact on their business.

“The one thing that businesses hate is instability and not being able to plan,” said Rosemary Coates, president of Blue Silk Consulting, which advises companies on managing their global supply chains. “You’re getting chased around the world by trade policy with no advance warning.”

Shifting to other countries could slash Xcel Brands’ labor costs in half. This is crucial, D’Loren said, because fashion companies have little ability to raise prices and would have to absorb the cost of higher import taxes. (SD-Agencies)

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