The Trump administration’s 100 percent tit-for-tat tariffs on up to $2.4 billion of popular French goods could bolster U.S.-made products.
Eighty-four percent of American consumers would consider switching to similar U.S.-made products, even if they are considered lower quality, in the wake of new tariffs on French goods, according to a survey by Intelligence Node.
That shift in brand preference would also correlate with a decreasing interest in purchasing products from French luxury brands, such as Hermès, Louis Vuitton and Chanel. Sixty-eight percent of the 1,000-plus U.S. survey takers said they would refrain from purchasing luxury products for themselves or for gifts.
Data also showed that 27 percent of U.S. consumers plan to stockpile their favorite French goods before tariffs increase, the global retail analytics and price optimization firm said. Consumers are most likely to hoard skincare products (40 percent), French cheeses (29 percent), and mobile electronics (24 percent). French handbags lagged significantly, with just 15 percent of survey takers planning to stock up on these items.
More than half (51 percent) of respondents believe retailers should absorb tariff-related cost increases and keep prices the same for customers. If retail prices creep higher, most consumers said they would probably accept up to a 20 percent hike before they began searching for a comparable item.
And over the past six months, 57 percent of consumers said they opened promotional emails from Amazon, 45 percent from Walmart, 36 percent from Target, 23 percent from eBay.
The idea for a new tariff on French goods surfaced earlier this month after lawmakers in France voted to impose a digital service tax on large foreign tech firms, including Google, Apple, Facebook and Amazon. A 3 percent revenue tax would apply to digital firms generating revenue more than 750 million euros ($830.9 million), with at least 25 million euros ($27.7 million) generated in France.
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The U.S., through Trade Representative Robert Lighthizer, was quick to respond with a proposal for the additional tariffs of up to 100 percent on French goods. The retaliatory tax proposal is going through the review process, which means that the tariffs aren’t likely to be applied before late January.
Intelligence Node works with more than 150 retailers and brands worldwide, including Li & Fung, Reliance and Jockey, using AI-driven insights to optimize their pricing and merchandising operations.
Last month, its holiday survey found that more than half of U.S. consumers planned to cut spending this holiday season to prepare for a recession, with most shoppers planning to make cuts in purchases of apparel, footwear and accessories. Retailers in the past month have been pushing out discounts and promotions to entice shoppers to buy, and this week some of the firms reporting quarterly earnings results have noted a higher rate of markdowns to move inventory at the start of the fourth quarter.