In the Q2 Global Retail Sourcing Report, it was reported that there was a softening in the US-China trade war, however at the time of printing our Q3 report, tensions have heated up considerably. The Trump administration applied another 10% tariff on $300 billion worth of Chinese imports starting on September 1st and the Chinese responded with their own measures.
While the US economy seems to have emerged unscathed from the trade war, China is most certainly feeling the impact, with contracting manufacturing, shifting production and a notable impact on their domestic economy. Most indicators also point to a global economic slowdown and many analysts believe a global recession is overdue.
Below are some highlights from the Q3 2019 Retail Sourcing Report.
- Vietnam, Bangladesh and a few others have been picked up as retail private label product sourcing alternatives to China
- Shipping carriers reduced capacity and are expecting a slower peak season
- Oil, cotton and other commodity/input costs saw significant declines into Q3
- The USD reached 2-year highs against the Chinese Yuan and the Euro
While China may be suffering, some experts believe the Chinese can afford to play the long game and are gambling on a change in the US administration in the next election cycle. At the same time China is building new markets for their retail product imports and are nurturing alternative trading partners other than the US. It looks like the remainder of 2019 should be a wild ride for retail product development, sourcing and supply chain management.
The Global Retail Sourcing Report aims to keep you ahead of the curve by providing facts, insight and analysis on issues impacting retail global sourcing. We produce this free report for individuals at retailers, brands and companies involved in global retail sourcing, supplier management, quality compliance and supply chain management. For more information on how the retail industry will be impacted by the escalating U.S. and China trade war and for other retail sourcing related topics read the full Q3 Retail Sourcing Report, today!