Why Tariffs Actually Mean For The Entire Retail Business Network

When the general public reads of the latest developments in the U.S.-China trade war, they likely consider the damage it’s caused to retailers’ bottom lines and consumers’ wallets. But what they might not know is that much of the financial damage wrought by the trade war has extended to their retail supply chain partners, including manufacturers, suppliers and global trade associates. Moreover, tariff-driven financial detriment compounds for suppliers and manufacturers, mostly due to their razor-thin margins and narrow business models. Here’s an example: For retailers, a 15% tariff reduces margins by an average of 10%. For suppliers, however, this same 15% tariff can cut profits in half. For smaller vendors and suppliers, this additional burden could mean financial ruin since they usually do not have a large enough customer base to maintain financial health by raising prices for other customers. Read more at Forbes.