Jie Mian Xin Wen·2025-03-26 04:08Core Viewpoint - The article discusses the impact of increased tariffs imposed by the U.S. on Chinese goods, highlighting how major retailers like Walmart and Costco are shifting the burden onto Chinese suppliers, leading to significant profit losses for these suppliers, with some reporting a drop of over 40% in profits [1][6]. Group 1: Impact on Chinese Suppliers - A Guangdong food company reported a more than 40% year-on-year decrease in total profits due to reduced orders linked to U.S. tariff policies [1]. - The company, heavily reliant on overseas clients, has seen order volumes cut in half as trade partners, who supply Walmart, are pressured to lower prices [1][6]. - Another Guangdong kitchenware factory indicated that the tariff situation has led to order delays and cancellations, reflecting a broader industry impact [5]. Group 2: Retailers' Strategies - Walmart and Costco are demanding significant price reductions from Chinese suppliers to offset the costs of the new tariffs, particularly affecting categories like kitchenware and apparel [1][6]. - The Chinese Textile Import and Export Chamber has called for fair resolutions from U.S. retailers regarding pricing pressures on suppliers [6]. Group 3: Financial Performance of Retail Giants - Walmart reported global revenues of $681 billion for the fiscal year 2025, with an 8.6% increase in operating profit, indicating a stable financial position despite tariff pressures [7]. - Walmart's gross margin has remained stable between 23% and 25% over the past five years, allowing it to absorb some of the tariff costs [7]. Group 4: Responses from Chinese Companies - Some Chinese companies are proactively seeking alternative markets and adjusting their supply chains to mitigate risks associated with U.S. tariffs [10]. - For instance, a pet supplies company has expanded its client base and established a factory in Cambodia to reduce reliance on U.S. tariffs [10]. - Stone Technology has begun shipping products from its factory in Vietnam to the U.S. to alleviate tariff impacts [11].