NEW YORK, Jan. 15 (Xinhua) -- Economic uncertainty is a major concern of retailers in the United States this year in spite of pretty economic data in 2018, said industrial insiders during the National Retailer Foundation (NRF) 2019 Retailer's Big Show that was held from Jan. 13 to 15.
US-China trade tension concerned businesses in terms of what the future holds in store and businesses began to put investment plans on hold because of economic uncertainty, said Janet Yellen, former chair of the Federal Reserve, while attending a panel session.
Economic uncertainty becomes a frequently-mentioned word by industry insiders at the Big Show, given ongoing US-China trade tension, potential global economic slowdown and the U.S. government shutdown.
Since both China and the United States agreed on Dec. 1, 2018 to continue the trade talks and stop imposing new tariffs, "retailers are closely monitoring that to see what will happen leading up to Mar. 1," Bethany Aronhalt, senior director of Media Relations at NRF, told Xinhua.
She said that additional tariffs are taxes that raise costs for retailers, and ultimately those costs are passed along to consumers. So, this is an issue for every retailer. And these tariffs are creating a lot of uncertainty. They are disrupting supply chains.
Aronhalt told Xinhua that to help NRF's members address the challenges, NRF have been actively lobbying on the issue, holding meetings with the administration and with the Congress, and having local events around the country with local businesses, so they can share their concerns on tariffs and make their voice heard.
"Smaller retailers, in particular, are having a harder time mitigating the impact of tariffs, and are being forced to raise prices, or delay plans to grow their businesses," she said. "They are being hit especially hard because they have less control over their supply chain. They are more of price takers rather than price negotiators."
Yellen's opinion that uncertainty impacting investment has been echoed by Steven Blitz, chief U.S. economist and managing director of TS Lombard.
"Uncertainty induced by US-China trade tension drives people to buy a lot of products sooner, because they want to get it in before the tariff goes up. It also makes them less willing to invest in their business and invest in certain supply channels, because they don't know if that supply channel is going to suddenly become more or less economic than the one that existed before," he said, adding that "so, uncertainty causes people to stop. And that's really the biggest problem. People just stop, firms just aren't going to spend money, except to get around the tariffs, because they can't pass it forward to their consumers."
"For businesses as well as people, once you know the rules, you'll gain this system to your advantage. But if you don't know the rules, because every day the rules are going to be different, then you just going to stop," he explained. (Contributed by Luo Jingjing)
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