US President Donald Trump has imposed a 10 per cent tariff against US$200 billion worth of goods from China, which is set to increase to 25 per cent at the beginning of 2019.
The president added that should China wish to retaliate, as it promised last week, the US will immediately begin preparing tariffs on a further US$267 billion of imports.
GlobalData Retail MD Neil Saunders observed it was good news for US retailers that the tariffs have been set at just 10 per cent.
“This will still increase prices, but it does mean that the steeper rate of 25 per cent will not be introduced before or during the critical holiday season,” Saunders said.
“However, should an agreement between China and the US not be found before the New Year, retailers could well start 2019 on a gloomy note.”
Saunders went on to point out that while the decision may be sound politically it would cause pain to the retail industry and the consumer.
Trump has warned more penalties may yet come.
“If countries will not make fair deals with us, they will be “Tariffed!”, he tweeted.