Walmart trying to unload the burden of tariffs onto Chinese manufacturers
The US retail giant has reportedly asked Chinese companies to cut prices to compensate for the Trump tariffs. Chinese suppliers complain that they are already working with very narrow profit margins to compete. China’s Ministry of Commerce warns the US company that its interests in the Chinese domestic market are also at stake.
Beijing (AsiaNews/Agencies) – The clash between Washington and Beijing over the new tariffs imposed by Trump has shifted to the retail sector.
Chinese state media report that China’s Ministry of Commerce held talks with Walmart, the US retail giant, over complaints by several Chinese suppliers, including kitchenware and clothing manufacturers, who say they have received a request from the US company to cut the selling prices of goods to compensate for the costs of duties.
In practice, this would mean unloading the White House’s tariffs onto manufacturers, to avoid repercussions on sales in the United States.
The additional 10 per cent tariff imposed by Donald Trump on Chinese goods came into force on 4 March, after the 10 per cent tariff introduced on 4 February.
Walmart's request is causing an uproar among Chinese companies, which are estimated to supply about 60 per cent of the products sold by the US giant.
According to the Bloomberg, most are already struggling with “razor-thin” profit margins, because the US company already buys goods at steep discounts to maintain its competitive advantage.
As a result, China’s Ministry of Commerce warned Walmart of the damage that its request could cause to the entire supply chain, negatively impacting Chinese suppliers but also US retailers and consumers.
According to reports from the Communist Party tabloid Global Times, Beijing reminded Walmart that China is behind the company’s global growth over the past year.
In the last quarter, Walmart sales in China grew by as much as 23.1 per cent year-on-year, far outperforming the US market.
Such results would be hard to replicate if the trade war were to continue.
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21/06/2018 10:23
22/02/2020 09:00
