The announcement of a 10 per cent import tariff on the remaining $300 billion worth of Chinese imports by the United States president Donald Trump has seen retail stocks lose value significantly.

The plight of the retailers was spoken about trade groups speak. However Columbia Sportswear CEO Tim Boyle decided to speak directly for the company about the threat of the fresh tariffs and said that the tariffs are “a disaster for the American economy, employers and consumers.”

Concerned about the possibility of this latest tariff being imposed, contingency plans were being made by retailing companies since the last one year.

Retail stocks fell for a second consecutive day since the announcement by Trump of the fre4sh tariffs. Trump took to twitter to make the announcement through a series of tweets on September 1 and said that the United States will slap a 10 per cent tariff on the remaining $300 billion worth of Chinese imports which had not been levied the tariffs earlier.

This $300 billion primarily includes a host of consumer products – ranging from clothing and shoes to electronics, and were left out of the tariff regimen.

While the lobby groups ate speaking on the behalf of most retailers on the issue and as the markets await the retailers to report quarterly earnings, not all retailers are choosing to stay mum.

“Let’s not tank the economy with the misguided conception that trade wars are fun,” Columbia Sportswear CEO Tim Boyle said in a statement. Tariffs are “a disaster for the American economy, employers and consumers,” he continued, adding that his company and others “will be forced to raise prices.”

There was a drop of about 11 per cent in the shares of Best Buy and the company has said that so far about 7 per cent of the total cost of goods sold has been impacted by the tariffs.

“While we understand List 4 as proposed is comprised of many consumer items, including many electronics, we think it is premature to speculate on the impact of further tariffs, as it is unclear whether List 4 will actually be implemented, what products would ultimately be included, at what rate, and when,” CEO Hubert Joly had said when he was asked to explain the possible impact of a fourth round of tariffs.

There was a 9 per cent drop in the stocks of shoe-maker Steve Madden and Piper Jaffray estimates that 94 per cent of Madden’s total manufacturing is done in China. According to the Footwear Distributors & Retailers of America, about 70 per cent of the total shoes that are sold in the retail market in the US is imported from China.

There was a drop in share values of department stores such as Macy’s, Kohl’s and Nordstrom. All of the three departmental stores offer a combination of own brands and exclusive merchandise and national brands such as Nike and Ralph Lauren.

According to estimates from Cowen & Company, there is a 20 per cent exposure for Gap and L Brands to China. There was also sharp drop in stocks of even those retailers that have much lower exposure to China such as Coach and Kate Spade owner Tapestry and Michael Kors’ parent Capri Holdings.

“We are disappointed the administration is doubling down on a flawed tariff strategy that is already slowing U.S. economic growth, creating uncertainty and discouraging investment,” said David French, senior vice president for government relations at the National Retail Federation. “The tariffs imposed over the past year haven’t worked.”

The proposed tariff was described as “truly shocking” by Rick Helfenbein, CEO and president of the American Apparel & Footwear Association. “The fact that this tweet comes after only one meeting with the Chinese delegation following the resumption of talks is extremely concerning,” Helfenbein said.

(Adapted from CNBC.com)

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