British retailers search for import solutions amid US tariff chaos
In light of these recent tariff changes, Next is reportedly considering establishing a US corporate entity to mitigate the impact, The Times has reported
British retailers are looking for ways to navigate recent import changes in the US amid ongoing “chaos and uncertainty” over Trump’s new tariff regime, with some exploring a restructure of their US operations or suspending exports altogether.It comes as the president recently imposed an additional 10% tariff on Chinese-made goods, whilst making a U-turn on the scrapping of the ‘de minimis’ rule, which allows small packages worth less than $800 (£645) to be shipped from China, Canada and Mexico to the US duty-free.
The U-turn over a decision to scrap the rule was made last week, when packages began to pile up at the border after the US Postal Service proving unable to quickly check the de minimis parcels.
In light of these recent tariff changes, Next is reportedly considering establishing a US corporate entity to mitigate the impact, The Times has reported.
By shipping orders to a US subsidiary instead of directly to consumers, retailers would be liable for tariffs on the cost price of the goods, rather than the selling price.
Meanwhile, the paper reported that Superdry has stopped shipping China-made products directly to US consumers to avoid the extra 10% tariff.
CEO Julian Dunkerton told The Times: “It [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.”
One source at another major retailer told The Times their company had effectively “turned off” its website during the ongoing chaos, while another sportswear retailer said US wholesalers were nervous over taking orders.
They said: “They’re thinking ‘Will this product be taxed? How will that affect my margin?’. Everything is taking longer and the general sense of uncertainty is hurting everyone … it’s making it harder to do business out there.”
Last week, it was reported that Shein’s £50bn London IPO plans could be in danger after Trump set his sights on closing the de minimis loophole that allows retailers like Shein to avoid tax charges in the US.
Investors who are expected to buy shares in the company when it lists will reportedly want assurances about the reliability of its forecasts, which will be difficult to provide given the uncertainty over the tax changes and possible impact on sales.
