U.S. Retail, Wrestling With Online Sales And Off-Price Brands, Now Battles Border Tax

By Joshua Fechter, San Antonio Express-News
San Antonio Express-News

WWR Article Summary (tl;dr) Major retailers, many of which manufacture goods overseas because of low labor and production costs, have come out against the border adjustment tax. More than 200 retailers and trade groups — including Walmart, Best Buy, JCPenney, Macy’s and Target — have signed on with Americans for Affordable Products, a coalition that opposes the measure.

San Antonio Express-News

U.S. retailers, battered by the rise of online shopping and off-price brands, are facing down a new and unlikely source of pressure: Republicans.

A series of protectionist proposals, from President Donald Trump’s on-again, off-again support for a tariff on imported goods to House Republicans’ push for the so-called border adjustment tax, have left apparel chains and big-box stores wary that their already rocky sector won’t receive the same push from the administration to rebuild their industry that has been promised to energy and manufacturing interests.

Retailers and analysts say protectionist policies will lead to higher prices on consumer goods, falling sales and accelerated retailer bankruptcies — adding more stress to an ailing industry.

“I think you’d just see more bankruptcies, you’d see more retailers in trouble, you’d see more store closings” if lawmakers approved a border tax proposal, New York-based analyst Jan Kniffen said. “It would just exacerbate what’s already a lot of pressure.”

Major retailers, many of which manufacture goods overseas because of low labor and production costs, have come out against the border adjustment tax. More than 200 retailers and trade groups — including Walmart, Best Buy, JCPenney, Macy’s and Target — have signed on with Americans for Affordable Products, a coalition that opposes the measure.

“It would be a significant burden to the retail community across the board in Texas as well as in the U.S.,” said George Kelemen, CEO and president of the Texas Retailers Association. “Ultimately, it’s a cost that would be passed onto consumers. We don’t think this is what House Republicans want or the White House wants.”

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