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How the US import tariffs against China could impact merchants

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US has imposed another round  of tariffs on China imports. This will affect $200 billion worth of goods from China. Office of the United States Trade Representative claim the measures are “as part of the United States’ continuing response to China’s theft of American intellectual property and forced transfer of American technology”.

While protectionist supports the tariffs, most economist view tariffs as “bad tax”. The impact could be far reaching and long term, as Jack Ma cautioned “China’s business and political leaders to prepare for the trade war with the U.S. to last 20 years” He added, “US-China trade war will wreck the AliBaba pledge to help create 1 million US jobs.”

What US consumers are buying from China?

In 2017, a total value of $500 billion was spent on Chinese goods, with electronics the highest. Cumulatively “Apparel, Electronics and Household goods ” make up 60% of the total consumption and it seems like it is on a growing trend.

USTariffsChart1

Data from US Census Bureau

What China consumers are buying from US?

Conversely, Chinese consumers are spending way less in US goods at $120 billion. Industrial goods consumption is at 73%, while Produce ranked 2nd. “Apparel, Electronic and Household” is less than 5% of consumption.

USTariffsChart2

Data from US Census Bureau

Which Chinese Goods is affected by US tariffs?

An article from Business Insider  has provide us with a summary list of goods affected by US tariffs. Most of the affected goods are raw material, produce and industrial, however, there are goods that could be sold in ecommerce channel like “Man-made Textile”, “Fabrics”, “Head Gear”, “Glassware”, “Precious Stone and Pearls”, “Electronics”, “Clocks and Watches”, “Furniture, Bedding Mattress”. The official list of 5,745 goods can be found here.

Items include

Photographic goods: various types of photo plates; instant film; various types of film in rolls; various types of motion picture film.

Plastics: vinyl flooring and other plastic floor and wall coverings; sausage casings; bags; gloves including baseball gloves; rain jackets; machinery belts.

Raw hides and leather: animal skins including cow, buffalo, sheep, goats, reptile; various types of leather made from cow, buffalo, sheep, goats, reptile; leather trunks and suitcases; leather handbags; CD cases; gloves including ski, ice hockey, and typical use; belts; fur clothing, including artificial fur.

Wood: fuel wood; charcoal; various types of wood including oak, beech, maple, ash and cherry; moldings; rods; particleboard; various types of plywood; doors; corks and stoppers; wicker and bamboo baskets.

Paper: Newsprint; writing paper; vegetable parchment; carbon paper; self-adhesive paper; cigarette paper; envelopes; tablecloths; handkerchiefs; folders.

Silk

Wool or animal hair products: cashmere; yarns; tapestries and upholstery.

Cotton: fibers; thread; yarn; denim; satin.

Flax: yarn; fabrics

Man-made textiles: polypropylene; rayon; nylon; polyester

Other textile products, rope, twine: hammocks; fish nets; carpets;

Fabrics: corduroy; gauze; terry towel; lace; badges; embroidery

Headgear: caps; hairnets; wool hats; head bands.

Stone, plaster, cement, asbestos: stone for art; marble slabs; roofing slate; millstones; sandpaper; floor or wall tiles; cement bricks.

Glass and glassware: balls; rods; drawn or blown glass; float glass; tempered safety glass; mirrors; carboys, bottles, jars, pots, flasks, and other containers; microscope slides; woven fiberglass

Various metal products, tools, cutlery: industrial items made from lead, zinc, tin, and more; saw blades; bolt cutters; hammers; wrenches; crow bars.

Electronics: vacuum cleaners; hair clippers; spark plugs; generators; bicycle lights; electric amps; television cameras; various types of TVs; video projectors.

Vehicles and parts: axles; driving shafts; gear boxes; radiators.

Assorted items: buttons; stamps; paintings; collections of zoological, botanical, mineralogical, anatomical, historical, archaeological interest; antiques of an age exceeding one hundred years

 

Commentary by Maverick Chung

References:

https://www.census.gov/foreign-trade/statistics/country/index.html

https://www.businessinsider.sg/trump-china-trade-war-list-of-goods-tariffs-2018-9/

https://www.cmtradelaw.com/2018/09/ustr-publishes-notice-formalizing-10-tariffs-on-section-301-list-3-on-sept-24-cms-unofficial-list-of-the-affected-hts-codes-provided-here/

https://ustr.gov/sites/default/files/enforcement/301Investigations/Tariff%20List-09.17.18.pdf

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/september/ustr-finalizes-tariffs-200

https://www.economist.com/the-economist-explains/2018/07/31/why-tariffs-are-bad-taxes).

https://www.bloomberg.com/news/articles/2018-09-18/alibaba-s-jack-ma-warns-u-s-china-trade-war-could-last-20-years

https://www.businessinsider.sg/jack-ma-trump-china-tariff-trade-war-alibaba-us-jobs-plan-2018-9/?r=US&IR=T )

Image Source: https://commons.wikimedia.org/wiki/File:FlagUSA_FlagPRC_crash.svg

 

Tmall offering “try before you buy” option

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As we all know returns is a big factor in ecommerce industry, ecommerce giants are coming up with ways to solve this problem. One of the ways to banned bad buyers, just like Amazon did in last month news article. The other way, which is trending now, is to allow consumer to try before buying. Alibaba’s TMall has introduced this “try before you buy” service for its online fashion shoppers.

The new service will let Alibaba Super Members (ie. loyal customers) with a Zhima credit (ie. Sesame Credit) score of over 550 to order clothes without payment and try them for seven days. If they decide to keep them, Tmall will automatically deduct the cost from their Alipay accounts. If not, shoppers can return them free of charge.

“Try before you buy” service is not new, in fact Amazon has pilot this program last year June 2017. It is called Prime Wardrobe, sharing similarities as its predecessor Stitch Fix and Nordstrom’s Trunk Club, which started in 2016.

In the latest news report 20 June 2018, Amazon’s pilot program is a success that it decided to open it up to all U.S Prime members.

Commentary by Maverick Chung

Source: https://www.wsj.com/articles/banned-from-amazon-the-shoppers-who-make-too-many-returns-1526981401
https://www.alizila.com/tmall-launches-try-before-you-buy-service/
https://www.usatoday.com/story/tech/news/2017/06/20/amazon-launch-try-before-you-buy-clothing-box/103053870/
http://thefederalist.com/2016/05/24/thinking-about-stitch-fix-heres-what-youll-find/
http://www.businessinsider.com/trunk-club-tacks-on-new-try-on-fee-2016-10/?IR=T

 

Cainiao-Led Group to Build HK Logistics Hub

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In line with Alibaba’s vision of a 24 hr local delivery and 72 hr global delivery, Cainiao Network will invest $1.5 billion on a new logistics hub at Hong Kong International Airport.

Hong Kong is not the only location that is part of that vision. Cainiao Network’s RMB 100 billion logistic hubs investment will extend over several cities, Dubai, Hanzhou, Kuala Lumpur, Liege and Moscow.

The new Hong Kong logistic hub will feature smart technology warehousing as unveiled during last month Global Smart Logistics Summit in Hangzhou. This includes, Internet of Things applications, big data, edge computing, artificial intelligence, auto-temperature and humidity, real time monitoring on storage capacities, automated guided vehicles(AGV).

The hub is expected to process over 10 million packages and an additional 1.7 million tons of cargo per year from Hong Kong airport. It would be operational by 2023.

Commentary by Maverick Chung

 

Thailand Post: Acing the logistics of e-commerce

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Thailand eCommerce is in the news this week they are covered in a story in the, Bangkok Post. The great news for APP and APP ePacket Members is the story is covering Thailand Post, expected growth in Cross border eCommerce using the APP ePacket Service. Thailand Post forecast that the ePacket service will generate a revenue of 100 mill baht, in 2019

In the previous year, Thailand Post has achieved revenue of around 27 billion baht. 13 % of the revenue or 3.5 billion is generated from Cross Border ecommerce

Comparing the e-commerce market share in Thailand, Thailand Post have around 30% while Deutsche Post DHL, lead the market with 45%.

Significant growth in C to C and B to C activities, arrival of e-commerce giants like Alibaba and JD.com are attributed to the growth.

For further reading please go to the below links. You may need to sign up, for free, with Bangkok Post.

https://www.bangkokpost.com/business/news/1476017/thailand-post-aims-to-grab-bigger-slice-of-overseas-pie

https://www.bangkokpost.com/business/news/1478345/acing-the-logistics-of-e-commerce

Commentary by Maverick Chung
Image source: Thailand Post

 

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