Consequences of the US-China trade war: prices will rise at Costco

Costco was the last seller to report price rises due to a trade war between the United States and China. TOThe company is looking for ways to avoid price increases.

Фото: Depositphotos

“Eventually, item prices are going to go up,” Richard Galanti, Costco's chief financial officer, said on an earnings call with investors. “We hope that differences in relations between our countries will decrease in this regard.”

This month, the Trump administration escalated its trade war with China, raising tariffs on imported Chinese goods from 10% to 25%. The president also threatened to add an 25% tariff to almost all the remaining goods brought from China.

On the subject: From soy sauce to computers: what products will rise in price after the introduction of duties on imports from China

Costco is just starting to feel the effect of a recent increase in tariffs affecting such items as furniture, bicycles and suitcases.

In some cases, the company is looking for a supplier of certain goods from other countries.

“We reached out to every supplier to see what we could do to reduce costs,” Galanti said. “In some cases, we have reduced order commitments... And we have taken advantage of lower prices on some items in the U.S.”

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Industry monitors say that a trade war can make items from smartphones to clothes more expensive, and also speed up the closure of stores.

As reported by ForumDaily:

• In August, 2018, USA introduced new import duties in the amount of 25% for goods from China. The list includes a number of Chinese products with a total value of 16 billion dollars. These duties are the second part of the fees on goods imported from the PRC in the total amount of 50 billion. The first part was introduced on July 6 and concerned goods for 34 billion dollars.
• Trump warned China that, in the case of mirror measures by Beijing, duties could be further extended to goods worth 267 billion. Thus, taking into account the existing measures, duties will be levied on almost the entire volume of Chinese imports to the United States, which exceeds 500 billion dollars a year.
• 20 February 2019 of the Year Trump demanded that China maintain a stable value of the yuan as part of trade negotiations between the two largest economies in the world. In particular, Washington hoped that Beijing would abandon the artificial devaluation of its currency in response to the introduction of US tariffs.
• 11 MAY Trump ordered to introduce customs duties on importing Chinese goods into the United States by about 300 billion more.
• Chinese authorities announced the on the introduction of increased duties on a number of categories of goods from the United States. In accordance with the decision of the State Council Commission on Customs Duties, from 1 June 2019, the rates of duties on a number of goods imported from the US totaling $ 60 billion will be increased and will total from 10 to 25%.

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