U.S. importers seek to load up ahead of tariffs
U.S. importers seek to load up ahead of tariffs
In his reelection campaign, President-elect Donald Trump proposed a tariff of up to 20% on all imported goods and a 60% tariff on goods from China.
If those are implemented, it means businesses would have to pay higher taxes and would likely pass those costs down to consumers.
But businesses want to avoid that as much as possible. And there is still some time between now and whenever those potential tariffs are put into place. So, businesses are trying to beat the clock by ordering ahead.
Grant Henegan, who owns a small chain of outdoor furniture stores in North and South Carolina, is hoping to double his imports from China as soon as possible.
“We’ve been talking to our vendors in the last couple of days, trying to understand what their capacity is and availability will be,” Henegan said.
It’s not looking so hot. Suppliers have already received extra orders ahead of the Lunar New Year in January, when factories shut down for weeks. Plus, lots of U.S. businesses are rushing to ramp up production too. Meanwhile, the inauguration is less than three months away.
“The tariff is going to affect you at the time of customs clearance, which may be four to five months from the time you’ve placed your order,” Henegan said. “So, I think time is against us if we want to get more product in the first quarter of next year.”
It’s unclear when or even if tariffs are coming. But Brian Bourke at Seko Logistics said businesses are preparing the way they did when the Trump administration imposed tariffs in 2018.
“Never once has a country paid those. The importers pay those,” Bourke said. “And the importers will look to mitigate against rising costs in any way that they can.”
Even if it’s a gamble. Bourke said shipping and storage rates will rise with demand, and it means spending money on stuff that might sit for a while, or not sell at all.
“The whole point of pulling inventory forward is to beat the clock when it comes to tariffs, but then you don’t necessarily have a customer quite yet,” Bourke said.
Trends come and go. So do seasons and seasonal goods. Some items even become obsolete.
“You don’t want to have six months’ or a years’ worth of inventory of notebook computers,” said Willy Shih, a professor of management practice at Harvard University . “And it becomes excess when the newer models come out and you don’t want the old stuff.”
It means some companies can’t stock up.
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