Retail expert Doug Stephens weighs in on new U.S-Canada tariffs
The U.S.-Canada trade dispute is moving from the border into American shopping carts.
New 50% tariffs on Canadian goods are already affecting categories including furniture and mattresses, while import bans that took effect Sept. 29 cover a range of Canadian alcoholic beverages, dairy-related products and other goods.
With the holiday shopping season approaching, retail expert Doug Stephens, author of "Retail Prophet" and the new "The Future of Competitive Advantage: A Business Plan to Save Your Customers, Your Company, and Democracy," offered his insights to Chain Store Age on what the tariffs will actually mean for consumers and retailers.
Stephens' insights are below.
•When shoppers will actually feel the tariffs: Existing inventory will temporarily cushion the impact, but fast-moving products could see price increases within weeks. Furniture, mattresses and other big-ticket goods could take one to three months to reflect the higher costs as retailers work through pre-tariff inventory.
•Categories likely to get hit hardest: Furniture and mattresses, of which Canada is a major supplier, will likely see the highest increases in price — upwards of 90% of which will be a pass through to the consumer.
•Why some Canadian products could simply disappear: Banned goods such as Canadian whisky, packaged beer, cider, rum, gin, vodka and other spirits will simply disappear. The Sept. 29 import restrictions cover a range of Canadian alcoholic beverages.
•What this means for Black Friday and holiday deals: Retailers dependent on Canadian furniture and mattresses will have less room to compete on price, potentially putting pressure on smaller U.S. retailers. Meanwhile, most major retailers have already locked in holiday orders, and much of their seasonal merchandise comes from overseas rather than Canada.
•The broader consumer-price picture: The overall effect on the cost of living to be relatively modest, but price increases in specific categories could be sharp — potentially becoming visible to consumers before the November midterms.
