Sourcing higher-margin products removes the need to increase prices, helping to retain price-sensitive consumers and maintain customer loyalty. < US retailers fear the tariff war with China will harm their business. When the US announced the plan to hike up tariffs on Chinese goods from ten per cent to 25 per cent, China responded in kind, placing retaliatory tariffs on an equal amount of American imports—including products used to manufacture apparel such as cotton, yarn and assorted textiles.
Brands across the spectrum are being impacted by the additional tariffs on Chinese merchandise. Given the recent taxes on imported goods, retailers need to source higher-margin products to offset these additional expenses and minimize the risk of unpredictable changes to future costs.
However, footwear retailers face unique challenges when it comes to sourcing high-margin merchandise. Footwear brands tend not to have high margins.
In the meantime, the European Union has placed its own retaliatory tariffs on some US goods like apparel and textiles, including T-shirts and jeans. Add to that, NAFTA negotiations are continuing to drag on under the constant threat that the US could pull out entirely. Together, it means there are few safe sourcing channels for retailers to rely on.