, NEW YORK, United States, Aug 2 – Earlier US tariffs enacted in President Donald Trump’s trade war with China have dealt only a glancing blow to consumers, but those announced Thursday are different.
“This hits consumers straight on,” Steve Pasierb, president of the Toy Association, said in an interview. “This is finished products. It’s not raw materials.”
The tariffs, a 10 percent levy on $300 billion in Chinese goods that Trump said would go into effect on September 1, is expected to affect just about all finished products imported from China.
Items that will likely have a levy include hairdryers, sneakers, flat screen televisions, bridal wear and other special occasion apparel.
The prospect of such broad-based tariffs has loomed over retailers for months and has been referred to as the “boogeyman” outcome by some in consumer-facing industries.
“It’s very unfair to the American consumer. It’s very unfair to the manufacturer and it shouldn’t be happening,” said Stephen Lang, chief executive of Mon Cheri Bridals in New Jersey and the head of the American Bridal & Prom Association.
Lang said that a 10 percent levy was less onerous than the 25 percent tariff that has been discussed and which he has previously described as catastrophic.
But Trump said Thursday he could lift the levy to “well beyond 25 percent,” referring to the 10 percent level as “for a short-term period.”
“We have too much testosterone between this government and their government, and we’re getting caught in the crossfire,” Lang said.
Retail shares hit
Leading trade groups criticized the announcement.
“We support the administration’s goal of restructuring the US-China trade relationship. But we are disappointed the administration is doubling down on a flawed tariff strategy,” said National Retail Federation senior vice president David French.
“These additional tariffs will only threaten US jobs and raise costs for American families on everyday goods.”
“Retaliatory tariffs, whether 10 percent or 25 percent, are bad policy,” said Gary Shapiro, president of the Consumer Technology Association. “Tariffs are taxes paid for by US consumers, not China’s government. These retaliatory tariffs are not an effective trade policy and may violate US law.”
Shares of retailers fell sharply Thursday, with the biggest drops affecting a group that included Best Buy, Target and Macy’s. Others to decline included Apple and Nike.
Retail giants Amazon and Walmart also dipped, but by less than most of their rivals because they are viewed as having more leverage with suppliers.
During an earnings conference call in May, Walmart Chief Financial Officer Brett Biggs said the company’s merchant teams have been focused on tariffs “for months and continue to execute appropriate mitigation strategies,” as he warned that some pricing impact was inevitable.
“We’re going to continue to do everything we can to keep prices low. It’s who we are,” Biggs said. “However, increased tariffs will lead to increased prices for our customers.”
Best Buy declined to comment Thursday, but argued against tariffs during a public comment period in June.
In a letter to United States Trade Representative Robert Lighthizer, Best Buy noted that the Trump administration had previously not imposed tariffs on flat screen televisions, laptops and other consumer items.
“Best Buy respectfully submits that USTR should not impose tariffs on the above-referenced consumer economics, just as it did last year when it wisely chose to forego imposing tariffs on flat panel televisions and other consumer electronic devices because of the negative impacts on the US consumers and economy,” the company said.
Threat to economy?
Thursday’s move could threaten US consumer spending, a bedrock of support of the American and global economy that has continued to show strength in economic indicators even as manufacturing and corporate spending trends have weakened.
Pasierb of the Toy Association said the impact of the tariffs may be mitigated in his industry somewhat because many retailers have imported goods earlier this year because of tariff risk.
But broad-based tariffs are a concern “because if all these goods become more expensive, you won’t have as much discretionary money for toys,” he said.
“My deep concern is that this is going to hit spending in the last three months of the year, which is our make-or-break period.”
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.