There’s essentially another tax increase in the works for American consumers and businesses, now that President Trump wants to place a duty on all imports from Mexico. As one might expect, it certainly wasn’t interpreted as good news for manufacturers, retailers or consumers. A number of trade organizations for retail, apparel and textiles have denounced the planned tariff on all Mexican imports. That’s nearly $350 billion in imports, with initial tariffs beginning on June 10 at 5 percent and scaling up each month until it reaches 25 percent on Oct. 1 if the Mexican government does nothing to curb the number of refugees trying to enter the U.S. at the southern border.
And as there’s been talk about a possible recession lurking on the horizon, the latest tariff threat will add to the concerns over a slowdown in the second half.
Tariffs, Trade Wars and Immigration: On Thursday President Trump opened another trade war front, this time with Mexico under the guise of immigration due to issues connected to the continued increase in migrants attempting to enter the U.S. along the southern border. But the latest plan to tax Mexican imports is just another component in the overall tariff landscape. There’s also ongoing tariffs on steel and aluminum, not to mention the planned increases connected with the trade war with China.
According to Mark Zandi, chief economist at Moody’s Analytics, “If all of the tariffs the U.S. has imposed remain in place, and there are no additional ones, the tax hike in 2019 will be over $50 billion. If the president follows through on all his tariff threats and maintains them, the tax hike next year would be [close to an additional] $130 billion. For context, last year’s tax cut totaled close to $200 billion to businesses and households.”
Expect more details next week on how all of these tariffs will impact U.S. businesses, consumers and even the global economy.
Earnings: More companies are slated to report earnings results for the week beginning June 3. The companies include Lands’ End, Stitch Fix, American Eagle, G-III and Guess Inc.
IPO: Revolve Group Inc., the online fashion retailer that caters to the millennial and Gen Z consumer groups, is planning to raise $200 million through an initial public offering. In a regulatory filing this week, the company said it expects shares will price between $16 and $18, each. The company is planning to go public during the week of June 3.
Events: The Fashion Footwear Association of New York is hosting its market week from June 3-7. Events will be held across the city at various member showrooms, with two main locations at 24 West 57th Street and the Warwick NY Hotel at 65 West 54th Street.