We at ETC are pleased to announce that Helen Ku has been promoted to Senior Vice-President and Client Portfolio Manager effective immediately. In addition to her current responsibilities, Helen will have full responsibility for the entire factoring and purchase order financing portfolio of clients.
President Trump’s promised trade war has begun and it doesn’t look like there will be any winners.
Earlier this year, Trump imposed a series of new import tariffs on goods made outside the US, particularly those made in China. The move has been controversial, largely because each affected country’s respective economy relies heavily on exports. As many economists predicted, however, China, India, the EU and Russia have all fired back.
The president signed the so-called “Trump Tariffs” in March in an attempt to combat “unfair trade practices“ in China and other manufacturing hubs. The newly established tariffs targeted $34 billion in Chinese-produced goods, as well as numerous steel and aluminum goods manufactured abroad.
Shortly after news of the proclamations broke, the EU pledged to place new tariffs on American-made goods in retaliation. Soon after, China announced plans to impose a 25% tariff on US exports, including motor vehicles, soy beans and lobster, which also total at $34 billion in value. Russia followed suit last week and began introducing its own tariffs on US goods, including mining and road building equipment as well as oil/gas industry products. India joined in last week as well, notifying the World Trade Organization that it would raise tariffs on 30 US products including almonds, seafood and chocolate.
Experts continue to debate the precise effects that the trade war will have, but many agree that US traders will struggle to maintain financial stability and accessibility to everyday consumer goods. Although the US is economically stronger than any of the other involved countries, we lack the infrastructure and workforce to supplement the manufacturing resources on which we’ve become dependent in recent decades.
The trade war also drew controversy within the White House and among the Republican party. Several party leaders including House speaker Paul Ryan and former White House economic advisor Gary D. Cohn lobbied against the trade plan. Cohn even resigned shortly after the plan was set in motion, though it is unclear whether he left specifically due to the trade war.
As of now, it is still unclear what the lasting effects of this trade war will be, but sources warn that US consumers and exporters will suffer the most. It may seem counterintuitive, but a combination of the price increases on goods that we continue to import to meet demand and the devastating effect that retaliatory tariffs will likely have on US farmers and manufacturers will probably have a far more detrimental effect than most activity in the ongoing struggle.
Needless to say, it’s difficult to predict precise outcomes this early in the process, but given the buying and manufacturing powers at hand, the international trade industry may change dramatically.
Fears of the “retailpocalypse” have died down, but brick and mortar retailers may be overlooking some of the most pressing problems they face in their attempts to innovate and better serve modern customers.
Following dismal sales last year, retailers began frantically creating new, often diversified versions of their former stores. Some are combining low-cost fashion retail with items typically found at grocery stores, others have opened popups and smaller store locations where customers can try items on before ordering them online. Although these methods are objectively good ideas, they fail to address another widespread problem: retailers and developers often ignore the culture of the neighborhoods where they plan to open new stores.
Although brick and mortar sales are improving in general, chic neighborhoods like New York City’s Greenwich Village are plagued with long stretches of empty retail space. Vacant storefronts, particularly on Bleecker Street, are the result of some overeager decision making following the gentrification of downtown Manhattan in the early aughts. Soon after wealthy new residents started arriving, so did a variety of upscale businesses. Some were successful but, eventually, a number of luxury retailers began popping up. They made decent sales initially, but soon it became clear that there wasn’t a demand for so many luxury goods in the Village, and stores began to close.
The fact that high-end retailers didn’t find a demand downtown isn’t shocking in itself, but by the time they closed the problematic lasting effect had already taken place. Since so many luxury brands appeared in such a short time, real estate prices rose so quickly and so dramatically that even the retailers who drove them couldn’t keep up. As a result, many commercial spaces remained empty months or even years after their previous tenants closed up shop. And they continue to remain empty.
It makes sense for high-end retailers to “follow the money,” so to speak, but they should still consider the history and reputation of the neighborhoods where they open stores. Greenwich Village has a rich history of diverse culture and art, including the LGBTQ community, numerous immigrant communities, and artists of every discipline and type. Though many of the people who brought such unique variety to the neighborhood are no longer there, the association remains. Thus, wealthy newcomers choose to move to the village for its historical uniqueness and creative atmosphere, rather than for high-end amenities.
The missing link seems to be that the choice to move downtown says quite a bit about the new residents. Given the income bracket in question, these residents could choose to live in almost any neighborhood, including New York’s Upper East Side, famous for its high-end retail and “old money” residents. The choice to live downtown suggests an interest in creativity and diversity among both the people and the businesses that populate the neighborhood. Although they may have a passing interest in luxury goods, they probably don’t prioritize them.
This same principle applies to retailers across the board. It’s often wise for businesses to swoop in when a town or neighborhood sees an uptick in residents with disposable income, but some basic market research can help determine if the newly popular location will be worth joining. If a neighborhood is populated with young families, a nightclub probably won’t do much business. Likewise, young people who are drawn to famously creative communities probably don’t care too much about high-end brands in their neighborhoods.