Tariffs could benefit Chinese firms the most: report

The US and China spent the weekend working on a trade agreement that could significantly lower the 145% tariff rate proposed earlier this year. The trade talks came just a few days after the US struck a deal with the UK to remove trade barriers on key products such as beef and ethanol, while retaining a 10% baseline tariff on the country.

In the meantime, the debate continues over who these tariffs will benefit. Writing for Marketplace Pulse, analyst Ben Donovan argued last week that Chinese firms paradoxically could end up benefiting the most from the tariffs.

Citing comments from Amazon CEO Andy Jassy, Donovan explained that US sellers sourcing from Chinese manufacturers often have to deal with intermediary suppliers, whereas Chinese firms are selling directly to US consumers, and so have “a significantly lower baseline” when it comes to cost.

The backdrop for this situation, he added, is that Chinese sellers have steadily gained market share on Amazon’s marketplace, surpassing the 50% threshold in January as US sellers fell to about 45%, per a report from Marketplace Pulse.

Buying American: Yet this longer-term hit could soon come against a US consumer base that is more invested in buying American. According to new data from e-commerce analytics firm SmartScout, which was shared with Modern Retail, searches for “made in USA products only” have spiked 220% year over year.

And while some brands are trying to capitalize on this newfound interest in US-made products, at least one major retailer is putting money behind helping these firms grow.

Walmart has unveiled a new program called Grow with US, which provides mentorship and resources to small businesses based in the US with the goal of helping them scale with the retailer. That includes the opportunity to showcase products at its annual US Open Call and even obtain financing through its Early Payment Program and Bridge Marketplace.