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US retailers try to soften tariff impact

US retailers and their suppliers are looking to mitigate impact of tariff on shoppers once 2019 starts. There are a variety of ways importers and shippers could offset tariff impact. Those include: sharing the cost of tariffs between importers and shippers and removing third-party fees from the landed costs of Chinese goods.

Importers could also get waivers if Chinese-made components are assembled in and shipped from a third country to the US or the third country’s components are just assembled in China. The US has imposed tariffs worth $250 billion on Chinese goods and China has imposed reciprocal duties of $110 billion on US goods. It is possible the US will impose new import duties on yet another $267 billion of Chinese goods.

This fourth tranche of import duties would likely hit a broader swathe of consumer goods such as apparel and personal electronics. The US wants China to end practices including technology transfer, subsidies to local Chinese companies and restrictions on foreign ownership that provoked the tariffs in the first place.

But China continues to resist—and in some cases reverse progress on—many promised reforms of China’s state-led economic model. The US trade deficit with China hit $375 billion last year.