The inside of Walmart’s Intelligent Retail Lab in Levittown, New York, where the retailer is testing a slew of new technology.
Shares of retailers are tanking as they are seen as the biggest target in the new round of China tariffs.
President Donald Trump abruptly ratcheted up the trade war with China Thursday, announcing the U.S. is putting 10% tariffs on $300 billion worth of Chinese goods, effective Sept. 1. Wall Street analysts that cover the industry had feared this development because the new tariffs will apply to a large swath of goods that they sell, raising their costs.
“Major consumer categories impacted by the final round of tariffs include: consumer electronics, apparel, footwear, and toys,” Goldman Sachs analyst Christopher Prykull said back in May. The bank had given a 30% chance that the last round of tariffs would be implemented at the time.
Oppenheimer said in June previously several “high velocity consumer categories” including apparel, phones and TVs would be subject to the tariffs on the last tranche of Chinese goods.
“Particularly this last round is much more consumer than industrial focused,” Oppenheimer’s Brian Nagel said on CNBC’s Power Lunch on Thursday. “Best Buy is very much the last man standing within the consumer electronics category but… it’s a much more price-sensitive discretionary purchase for the consumer.”
“We remain concerned that while most retailers expect to pass costs onto consumers, a deluge of concurrent price increases could potentially ‘shock’ or stall consumer spending overall,” Oppenheimer’s Brian Nagel wrote in the June note.