Chalk it up to human nature and perhaps a news cycle chock full of alarmist headlines, but many Americans have been notably blasé about a China trade war that’s dragged on interminably and whose future President Trump cast in doubt with yet another cryptic tweet Thursday saying, “They want a deal, but do I?”
For now, it seems the NBA’s accidental foray into the China conundrum that sparked a game-cancelling brouhaha has managed to cut through the noise and catapult all things China into consumer consciousness. And just in time, too, with the holiday season heating up and tariffs on China-made products just waiting to bloat shopping lists far and wide.
A new survey of 1,057 U.S. consumers by supply chain software provider JDA uncovers a sentiment that reflects relative disinterest in the tariff-centric China trade conflict—that is, until people realize how their bank accounts could stand to lose in the Sino-American saga.
While most (85 percent) expressed some sort of familiarity with the protracted war, nearly two-thirds (65 percent) claimed they haven’t amended their spending behaviors in any way as a result, but the vast majority (83 percent) are at least a little bit worried the dispute will send retail prices soaring.
Despite that evident concern, when asked how the trade war could affect their holiday shopping budgets versus last year, most (46 percent) said the specter of tariffs would not change their planned spending, though an equal percentage claimed they’ll be tightening the purse strings somewhat—or significantly.
And who can blame consumers for spending cautiously when economists are sounding the alarm over a potential downturn? Scars from the Great Recession have barely healed for some, and millennials—love them or hate them—have spurred new business sectors and models as a result of the late-aughts crisis.
The next round of tariffs is poised to take effect on Oct. 15, when the 25 percent duty on $250 billion worth of China imports is set to rise to 30 percent unless President Trump and the Chinese delegation hammer out a new deal at their meeting Friday. But it’s the planned Dec. 15 tariffs on $300 billion worth of goods that lands at a most inopportune time in the holiday shopping season.
Again, however, JDA’s survey finds what amounts to a shoulder-shrug from many consumers. Nearly one-third (31 percent) won’t be shopping earlier to avoid the potential tariffs and 20 percent have no idea what they’ll do.
Retailers will have to be prepared to serve the nearly half (49 percent) of consumers who said they’ll make some or all of their holiday purchases ahead of the Dec. 15 tariff deadline in order to circumvent what could be higher costs at checkout. Already, retail businesses have been stepping up their cargo imports in line with both the enforced and threatened tariffs and the holiday season.
Given China’s status as a smartphone-producing powerhouse, most consumers (50 percent) are rightly concerned that these and other electronics will set them back more than usual during the holiday season. About the same percentage are concerned that apparel (29 percent) and footwear (21 percent) will bear higher prices come December, according to the survey.
Knowledge is power, as it turns out, and now more than 88 percent of the survey takers plan to keep a close eye on the unfolding tariff wars, or at the very least take a general interest, now that they understand what it means for their personal finances.
Retailers courting younger consumers will be interested to know that half of those straddling the Gen Z/millennial divide in the 18-29-year-old age range intend to spend earlier in the holiday season to get the best deals ahead of the planned December tariffs.