The United States cheap retail giant: trade war will make us low-income consumers miserable.

Dollar Tree, the cheap supermarket chain in the United States, is one of the most heavily affected by the increasingly fierce trade war, and of course has a large middle-income and low-income customer base, the USA Today website reported on October 8.



At the end of last month, the US government imposed a 10% tariff on Chinese imports worth 200 billion US dollars. Unlike the previous rounds of tariffs on Chinese products, the new tariff measures involve everyday consumer goods. However, these were originally the best choice for Dollar Tree, which has 15,000 chain stores and discount stores across the United States.



Dollar Tree executives say many of the cheaper goods it sells are made only in China, most of them from China. Dollar Tree also imports about 42% of its goods, and Family Dollar accounts for about 23% of its discount stores, according to Telsey Consulting Group.



Dollar Tree CEO Gary Filbin told a U.S. Trade Representative hearing at the end of August that tariffs would affect 10% of the company's goods, including thousands of commodities such as daily use, health care, beauty, diet, electronics and so on. Tariffs increase the cost of Dollar Tree imports, which eventually pass on to consumers.



Most people who go to discount stores feel pinched up, while those who shop at the dollar stores feel more and more visibly pinched up on budgets. However, higher consumption costs are still waiting ahead, and the new tariff will increase to 25% on the 1 day of January 2019.



In a letter to Robert Letschizer, the U.S. Trade Representative, Philbin also said that Dollar Tree could not raise the price of goods. All goods were sold for only $1, but the price of Family Dollar, a discount store, had more room for adjustment. If trade frictions between the United States and China are not resolved as soon as possible, he said, the number of goods in stores is likely to decrease, and some goods will become smaller in size while maintaining their original prices. In addition, if profits fall, the company will reduce investment and recruitment.



More than 60 percent of Dollar Tree and Family Dollar's customers make less than $40,000 a year, and half make less than $20,000 a year, according to Philbin. These people are one of the most vulnerable consumers in the U.S. to negative effects. They rely on cheap stores to buy things, save daily consumption and maintain a balance of payments.



It is reported that there are a wide range of commodities that are subject to tax increases, including vegetables, perfumes, shampoos, cosmetics, dog chains, bags, paper, sheets, plates, cups, carpets, batteries, clothes, hats, tweezers, screwdrivers and lamps. Philbin said at the hearing: "American consumers will be miserable."