“It’s not great, but it could’ve been worse.” That seems to be the main reaction by retailers to news that the Trump administration had reached a tentative tariff deal with Vietnam that called for 20% levies on imported goods from that country, rather than the originally proposed 46%, according to a variety of news sources, including CNBC.
“It’s a lot better news than where we were on ‘Liberation Day,’ [when Trump originally called for a 46% tariff on Viet-sourced goods]” one CEO of a popular consumer brand told CNBC. Another exec called the news “bad” but agreed that a 20% tariff was better than the higher figure, however unrealistic that was.
“I guess Trump needs ‘positive’ news,” a third executive said. “I think things are going to evolve. Let’s see if this is definitive.”
Many executives worry that even a 20% tariff will be bad for businesses and consumers. Paul Cosaro, the CEO of Picnic Time, a supplier to Target, Kohl’s, Macy’s and other chains, told CNBC that if the clocks were wound back to April and Trump said there’d be a 20% tariff on Vietnamese imports, “no one would’ve been happy.”
“There could be threats of a 46% tariff and you come back with 20% and it’s going to sound better but… it’s just more money coming out of the consumers’ pockets at the end of the day, and they have less money to spend on picnic baskets and coolers and things like that,” said Cosaro. “It’s not good for the consumer. Ultimately, it’s just increasing the prices … I don’t think that’s good news.”
Overall, Vietnam is the second-largest supplier for footwear, apparel and accessories sold in the U.S. market (after China), according to the American Apparel & Footwear Association. Looking ahead, some companies believe the new agreement with Vietnam – which has yet to be formally ratified – is also a sign that Cambodia, Malaysia and Bangladesh could reach similar frameworks.
Advertisement
