UK retailers reportedly mull US subsidiaries and halting Chinese imports amid tariff shifts

US president Donald Trump brewed up what could be considered the beginning of a trade war last week when he announced a series of tariffs and impending tariffs on some of the world’s largest markets, including China. From the get-go, Trump has made it clear that the UK and the EU are also being considered in the way of tariffs, leaving many British retailers scrambling to prepare for such circumstances.

Among those reportedly seeking new means of operation are Next and Superdry, which are each exploring differing options in their preparation for tariff impact, according to a report by The Times. Next, for example, is said to be mulling the establishment of a US corporate entity to handle operations, the media outlet said. While such a procedure could come with administrative challenges, it could also help the retailer in reducing its tariff burden, requiring duty payments only on the cost price of goods.

Superdry, meanwhile, is believed to have already ceased shipping China-made products directly to the US to avoid additional tariff costs. The retailer’s chief executive officer, Julian Dunkerton, told The Times that tariff changes were making such shipments unprofitable, bringing more complexities onto the supply chain.

After imposing a new 10 percent tariff on Chinese-made goods last week, Trump further opted to halt the ‘de minimis’ rule, which had allowed goods worth under 800 dollars to enter the US duty-free. Analysts in the UK have suggested that this could result in an increase in cheap goods flooding the UK and European markets as companies like Shein change their focus. RSM’s customers and international trade partner, Brad Ashton, also said that UK retailers could experience a “double blow” if the origin of their goods is China, meaning these products would still be subject to tariffs, even if they ship from the UK.