U.S. manufacturers and retailers accelerate shift away from Chinese suppliers; Carter’s planning to reduce its reliance on China


September 10, 2019 – Financial Times – U.S. retailers are ditching Chinese suppliers at an accelerating rate in response to President Donald Trump’s trade tariffs, switching sourcing of thousands of goods from furniture to bicycles to countries such as Vietnam, Cambodia and Thailand.

Top executives at several household names have disclosed fresh details of their tariff response plans since the latest tranche — 15 per cent levies on $112bn worth of Chinese imports — took effect on September 1. While U.S. retailers have been reducing reliance on China for years due in part to rising labor costs, Washington’s trade dispute with Beijing has spurred them to redouble their efforts.

The push to reshape supply chains is set to gain further momentum now that President Trump has followed through on his threat to widen the tariffs net, taking in consumer goods from alarm clocks to baby clothes. Michael Casey, chairman and chief executive of children’s clothing chain Carter’s, said the New York-listed company was planning to reduce its proportion of products sourced from China to less than 20 per cent by the end of this year from about 30 per cent a year ago.

Speaking at a Goldman Sachs conference, he said Carter’s had “developed a path that would take us closer to 10 per cent, if the risk of [additional] tariffs increases”. Cambodia had become the largest supply source for the company, which has more than 1,000 stores across North America. “We’re proceeding as assuming these tariffs will stay in place indefinitely,” he said.

Read more at the Financial Times.