NRF Upgrades 2018 Forecast but Says Chinese Tariffs Remain a Big Worry
The National Retail Federation upgraded its 2018 retail forecast, for sales to increase 4.5 percent “at a minimum” over 2017, it said Monday. NRF’s February forecast was 3.8-4.4 percent. “Tax reform and economic stimulus have created jobs and put more…
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money in consumers’ pockets, and retailers are seeing it in their bottom line,” said NRF President Matthew Shay. “We knew this would be a good year, but the first half turned out to be even better than expected,” when retail sales increased 4.8 percent from a year earlier, he said. Trade Act Section 301 tariffs on Chinese imports remain a big worry, and “we don’t want to see these economic gains derailed by protectionist trade policy,” said Shay. “With retailers ramping up imports and stocking their warehouses before most of the proposed tariffs will take effect, an immediate impact on prices on consumer goods is unlikely, but that won’t last for long.” NRF fears “mere talk of tariffs negatively impacts consumer and business confidence, leading to a decline in spending,” he said. “Replace tariffs and talk of trade wars with diplomacy and policies that strengthen recent gains.” Tariffs of 25 percent on $34 billion worth of Chinese goods took effect July 6, and are scheduled to take effect Aug. 23 on another $16 billion, said NRF. Those first and second tranches affected "a relatively low number of consumer products," but the third on $200 billion "would include a broader array of consumer items," and is "expected to be finalized in September," it said.