Macy』s has put Wall Street on notice that its profits would be jeopardised if President Donald Trump follows through on his latest tariffs threat in a sign of corporate America』s growing alarm over trade tensions with China.
The US retailer cautioned on Wednesday that its full-year target for sales and profits would be threatened if the administration imposed 25 per cent tariffs on a fourth wave of Chinese imports.
Jeff Gennette, chairman and chief executive, said that the most recent measures on $200bn worth of goods, set out last week, had 「some impact」 on Macy』s furniture business, but overall the retailer was managing with the existing tariffs.
However, he said, the threatened fourth tranche on a further $300bn of Chinese imports would be 「the big one」, with clothing and accessories among the goods affected. 「It is hard to do the math to find a path that gets you to a place where you don』t have a customer impact,」 he said.
Macy』s, which employs 130,000 people and operates about 680 department stores under its eponymous brand and Bloomingdale』s, is among the first in a series of US retailers to report quarterly results.
Retailers are trying to diversify supply chains and shift sourcing out of China, but analysts have warned rising import costs will force them to push up prices or sacrifice profit margin. UBS retail analysts estimated in research published this week that tariffs 「could put an additional $40bn of sales and 12,000 stores at risk」.