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Brick and Mortar Retailers’ Future Uncertain Amid Tariff Hikes

Although online shopping has been a constant roadblock for brick and mortar retailers, the latest revelations in the U.S.-Chinese trade war debacle is proving to be yet another hurdle for retailers nationwide, according to financial services firm UBS.

President Donald Trump announced last week that the administration will raise tariffs to 25% on $200 billion worth of Chinese goods. This news was followed up on May 13 with a list of $300 billion in Chinese goods that could be affected by the tariff hike, including clothing, shoes and sportswear. According to UBS, analyst Jay Sole said such tariffs "could force widespread store closures."

"We think potential 25% tariffs on Chinese imports could accelerate pressure on these company's profit margins to the point where major store closures become a real possibility," Soles states in the article. "We continue to think the apparel and footwear consumer's willingness to spend remains tepid at best."

In its research, CNBC reported, UBS predicts nearly 21,000 U.S. stores will close by 2026, with 50% of the closures happening within a year.

—Andrew Michaels, editorial associate

Strategic Global Intelligence Brief for May 15, 20...
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Thursday, 28 March 2024

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