As we’ve previously reported on our blog, the Trump administration announced this July that more tariffs would be in effect on a large number of Chinese imported goods.
These taxes went into effect on September 1, 2018, but additional tariffs have been added to Chinese imports since the initial press release.
As of September 24th, a 10 percent tax has been placed on up to $200 billion worth of goods. Assuming there are no more changes in the trade war, this tax will increase to 25 percent beginning January 1, 2019.
China has responded to the U.S. tariffs with taxes of their own, adding duties on $60 billion worth of goods imported from the United States to China. Should China decide to retaliate further, the Trump administration is prepared to increase the amount taxed on imported products from China to $267 billion.
How the Industry is Managing Costs
With all the unknowns in the trade war, one thing is for sure — nothing is set in stone, and that includes the industry’s response to this situation. Here are a few ways those in hospitality are handling the new tariffs:
- Domestic Demand: Now more than ever, hospitality procurement firms are utilizing their relationships with domestic partners to circumvent the hefty increased fines on imported goods.
- Manufacturing Solutions: Manufacturers are actively looking for ways to absorb the costs of the tariffs so that the fines don’t fall on their clients, as well as exploring alternative distribution and manufacturing options.
- Warehousing Goods: For imported items, many purchasers are choosing to expedite their shipments and keep the products in storage so that the deliveries take place before taxes increase even further in 2019.
Note: Another incentive to place orders ahead of schedule is to combat any delays caused by the Chinese New Year.
Innvision remains informed on all events related to the U.S.-China Trade War in an attempt to actively manage the timing and costs of client shipments and minimize the impacts.
As your source for all FF&E procurement news, we are committed to sharing all relevant updates (including tariff announcements) promptly. Our goal is to address potential setbacks and safely navigate your project through these uncharted waters.
Disclaimer: While the information in this blog was up-to-date at the time of publication, the developing news on this topic may affect accuracy.