The situation is fluid. Till the tariffs freeze, till the negotiations are done, it’s like clobbering the anvil hoping for the shoe to take shape. What and who takes the beating, and who will get what and how an outlet to escape or rework will be known after 90 days.
As I hammered this out last evening, a rollicking tit-for-tat was on as China retaliated with 84% tariffs and US Prez Donald Trump hurled back @104%(!) and a couple of hours later one read and heard 125%!
I slept late night to the news that the tariffs had been put on “pause” for 90 days—“authorised a 90 day pause, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.”
@realDonaldTrump announced on Truth Social:
Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable. Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.
I woke up wondering if I had dreamt the ‘pause’. Yes, I do dream catastrophic current events in both black-and-white and technicolour and more often than not wake up to a heart-pounding, nail-biting racy, bizarre turn of events—at times a nightmare, but more often a smiling recap that flashes back any time during the day.
So yes, the “pause” is on. The next 89 days will be critical as countries now have the breather to negotiate, to take stock of what is and what needs to be done or can be done.
Putting it briefly, the tariff ‘season’ began in February when Trump signed an Executive Order imposing tariffs on goods coming into the US from Canada, Mexico and China. A reprisal, a pull back and again some retaliatory action later by Canada, this in mid-March, leading up to 2 April when a baseline 10% tariff was announced on all imports from all countries, with higher tariffs for some.
Trump country tradesters were vociferously protesting the tariffs, and reflected as much as stocks took a beating, impacting the big boys like Nike, Skechers and Crocs which rely on China (61.9%), Viet Nam (21.4%), Indonesia (6.9%), Cambodia (3.9%) and India (1.3%) as their manufacturing hubs. This data is from the American Apparel & Footwear Association (AAFA).
The largest footwear market in the world, generating over US$85.8 billion in revenue in 2022, the tariff talk impacted discretionary spending in the US as consumer wallets were in check following concerns about rising inflation.
Matt Priest, President and CEO of the Footwear Distributors and Retailers of America (FDRA) that represents 97% of the industry, had said on Tuesday that according to an industry sales survey that included 3,000 stores, sales fell by more than 26% during the week ending 22 February as compared to the same retail week last year.
However, the ‘pause’ ensured that the stocks rallied back: shares of Nike, Skechers and Crocs went up by 11–11+%, while Vans and Timberlands’s VF Corp saw an almost 28% surge, and that of Wolverine 22%.
