US retail sector set to feel the tariff pinch

LAS VEGAS - It was a bright sunny day in Las Vegas on Tuesday without a cloud in the sky, except the storm clouds were carried in by the escalating US-China trade disputes.

Inside the bustling Las Vegas Convention Center, apparel buyers and sellers from all over the world gathered to make deals at the MAGIC Show, one of the largest and most influential fashion trade shows in America.

A specially designated area of the show was the Premium China Footwear Pavilion, which was chock full of apparel and footwear merchandise of all kinds made in China, ranging from socks priced at 10 cents to $7,000 hand-embroidered designer boots.

"The Las Vegas MAGIC fashion market is very transaction-oriented. People come here to make deals. That is why it has been at the forefront in the industry for 70 years," said the pavilion's organizer, Christopher Griffen, president of International Business Development for UBM Fashion, a leading producer of world-renowned fashion trade shows.

However, for many attendees this year, the looming shadow of the escalating China-US trade disputes is making deals increasingly challenging.

With margins minuscule, US President Donald Trump's latest threat to levy a 10-percent additional tariff on shoes, clothing and other items, is likely to put them out of business.

Rachel Meng, an economics graduate of China's Anhui University and now general manager of six factories in China, stood by her booth in the pavilion, hoping to bring substantial orders for her factories.

"We export all over the world. The 'Made in China' manufacturing market is still the largest, and Chinese workers still work the hardest and do the most reliable work," she said proudly.

She explained to Xinhua that her factories have been specifically established to meet US demand exclusively. Her big-dollar store clients represent the fastest-growing phenomenon in the otherwise bleak US retail market, filling the gap left by the highest number of retail shop bankruptcies since the 2008 global financial crisis.

Dollar General, the discount retail chain selling goods for one dollar, is one of her clients relying heavily on affordable, good-quality imports made in China.

With 15,000 stores in mostly rural US areas, the company gained revenues of $25.6 billion in 2018. Without Chinese suppliers, however, their prices would rocket and their revenues would plummet, hitting America's poorest regions the hardest.

Finding reliable replacements for all the Chinese-made merchandise is not a viable option for many reasons, said Matt Priest, president and CEO of America's top trade organization Footwear Distributors and Retailers of America.

"People don't realize how difficult it is to make a good pair of shoes," Priest told Xinhua.

"It's very labor-intensive, very detail-oriented, and China does this very well. It also takes a long time to move production and find new partners. You run into quality issues, compliance issues, chemical issues - nothing about it is easy or quick," Priest said.

"Diversification is important, but that can't replace a long-term relationship with Chinese suppliers that's been built on decades of perfecting quality shoes," Priest said.

"US consumers are very particular about product quality, safety and sustainability. Those have been developed over years in China to get them right. But when you move to some other undeveloped countries, they don't have any of that and they don't have the capacity to meet our needs," Rick Helfenbein, president and CEO of the American Apparel and Footwear Association, told Xinhua News Agency.

Helfenbein cautioned that Trump's tariff amounts to nothing more than a huge consumer tax.

"This is devastating for American businesses and will put our industry back by 10 years," he said. "We are looking at a tough road in front of us."