The U.S.-China trade war “is taking its toll, especially on China,” eMarketer reported June 25, cutting its 2019 outlook for China and the U.S. As a result, China won't surpass the U.S. in total retail sales this year, as expected, and won't, based on current conditions, until 2021, when it's forecast to pass the U.S. by $93 billion. EMarketer forecasts China retail sales will hit $5.3 trillion this year, up from $5.1 trillion in 2018 vs. U.S. retail sales of $5.5 trillion this year, up from $5.3 trillion. Slowing auto sales are the main drag on the Chinese economy, it said. The U.S. “is not immune to the effects of retaliatory Chinese tariffs,” the research firm said, cutting its previous outlook for U.S. retail sales growth from 3.2 percent to 3 percent, amounting to $5.47 trillion. By share, the U.S. has 21.9 percent of the global retail market vs. China at 21.1 percent, but China’s e-commerce market -- “by far the largest” globally at $1.93 trillion -- is three times that of the U.S.; that forecast is “largely unchanged.” Despite the slight slowdown this year, it said, U.S. e-commerce sales are expected to exceed 10 percent of total retail sales for the first time, with e-commerce growing 14 percent to $586.9 billion.

Hundreds of small companies and individuals, along with the Automotive Parts Remanufacturers trade association, have sent a letter to President Donald Trump saying they support the imposition of 25 percent tariffs on Chinese imports, and urging him to stand strong in his fight. The letter, organized by Coalition for a Prosperous America, was sent June 21. "Many in the media and those self-interested in China have argued that Americans are bearing the cost of these tariffs. That is simply, false. China is bearing the burden of these tariffs. China has had to lower its prices, and they are experiencing fewer exports, lower profits, and lower tax revenue as a result of the tariffs," they wrote, and said there has been "zero impact" on U.S. inflation from the tariffs.

The title of the panel discussion was "21st Century Management at our Ports of Entry," but panelists acknowledged that there are many ways the border operates that aren't modern at all.

The proposed List 4 Section 301 tariffs cover “all of Apple’s major products,” and would harm the company’s “global competitiveness,” the iPhone maker said in heavily redacted comments posted June 20 in docket USTR-2019-0004. “The Chinese producers we compete with in global markets do not have a significant presence in the U.S. market, and so would not be impacted by U.S. tariffs,” Apple said. “A U.S. tariff would, therefore, tilt the playing field in favor of our global competitors.” Tariffs also would reduce Apple’s “U.S. economic contribution,” it said. It vowed last year “to make a total direct contribution to the U.S. economy of over $350 billion over 5 years and we are pleased to report that we are on track to achieve this contribution,” the company said in the filing.

Despite three rounds of Section 301 tariffs and the threat of a fourth, “very few customers are moving existing production out of China,” CEO Mark Mondello of supply-chain services provider Jabil said on a fiscal year Q3 earnings call June 18. The “deep-rooted, mature supply chain that's foundational to China” has most customers staying put, he said. Many also “don't see a reasonable payback” from shifting sourcing elsewhere, plus “a decent percentage” of their Chinese production is “for final consumption in geographies other than the United States,” he said. Some customers have decided “to ramp some of their new products” in countries of origin other than China, he said. “I think that's really healthy. It's really good for us because it continues to help us balance factories and factory loading.” Mondello wants “things to get settled, and settled as soon as possible, between the U.S. and China,” he said. “If things got really, really bad, either short-term or long-term, I think it's going to be tough on everybody, us included, but let's hope that that doesn't occur.”

Ricoh Americas is “currently assessing the potential impact” of the proposed List 4 Section 301 tariffs of up to 25 percent “on nearly all remaining goods manufactured in China and imported to the U.S.,” the vendor emailed in an announcement to business customers on June 17. “The government-proposed tariff increases are not specific to Ricoh and span far beyond our industry,” it said. “Be confident that we continue to review and optimize our global supply chain to minimize the potential impact for both Ricoh and your organization wherever possible.” While Ricoh will do its best to mitigate any impact, “it is possible that the outcome cannot be avoided, and we anticipate there may be some impact to pricing,” the vendor said. “If, despite our efforts, there becomes a need to increase pricing for new purchases, we will work with you to create solutions that optimize cost, delivery, and value.”

Broadcom expects its semiconductor business to take a $2 billion revenue hit from the U.S.-China trade war, including the Trump administration's "Huawei export ban,” CEO Hock Tan said on a fiscal Q2 call June 13. The trade frictions are “creating economic and political uncertainty and reducing visibility for our global OEM customers,” he said. “Demand volatility has increased and our customers are actively reducing inventory levels to manage risks.” The $17.5 billion in semiconductor revenue Broadcom now expects in the fiscal year ending in February will translate into a year-over-year decline in the high single-digits, Tan said. Huawei generated about $900 million of revenue for Broadcom last year, but the market softness that prompted the company to shave $2 billion off its semiconductor revenue forecast “obviously extends beyond just one particular customer,” Tan said. “We're talking about uncertainty in our marketplace,” and that’s causing “compression” in the supply chain that’s reducing orders, he said. “It's broad-based.” With the revised forecast, “we tried to capture everything” in the business “environment,” including the impact of the proposed List 4 tariffs on Chinese goods, Tan said. The environment “is very, very nervous, and that's why we see a very, very sharp and rapid contraction of the supply chain and orders out there from our customers,” he said.

Tariffs Hurt the Heartland sent a letter to President Donald Trump June 13 saying that he should push China to change its trade practices, but said, "broadly applied tariffs are not an effective tool to change China’s unfair trade practices." The letter, signed by 520 companies and 141 associations, said, "We remain concerned about the escalation of tit-for-tat tariffs. We know firsthand that the additional tariffs will have a significant, negative and long-term impact on American businesses, farmers, families and the U.S. economy."

Ford Motor Company is "evaluating our options following the most recent ruling" on tariff engineering and the applicable duty rate for the Ford Transit van (see 1906070061), the company said in a June 12 Securities and Exchange Commission filing. The U.S. Court of Appeals for the Federal Circuit on June 7 overturned a Court of International Trade decision that had said vans imported by Ford are classifiable as passenger vans and dutiable at 2,5%, even though the stripped-down rear seats included in the vans were removed right after clearing customs. "If we ultimately receive a favorable ruling, we will receive a refund of the contested amounts paid and we will treat the refund as a special item," the company said. "Similarly, if we are required to pay the higher rate for prior imports, the payment will be treated as a special item." Neither event would affect the company's earning guidance, it said.

Trade groups that represent steel-consuming industries say it's wrong to think that just because there haven't been massive job losses the tariffs aren't economically significant to their members.