COLUMBIA, Mo. — According to a new report from USA Today, the Administration’s escalating trade war with China is disproportionately affecting Dollar Tree and its customers who are “especially budget-constrained and would be hurt by what is essentially a new tax on their purchases.” USA Today writes that as a result of the tariffs, the company also “may pull back investment and hiring in communities if its profits fall.” More than 60 percent of Dollar Tree’s shoppers have an annual household income of less than than $40,000.
As a reminder, Josh Hawley continues to support the Administration’s trade war, which has already cost Missouri hundreds of jobs and millions of dollars in economic activity. The Administration’s newest wave of tariffs puts industries in every single Missouri county at risk.
Few stores, and shoppers, are as affected by the Trump administration’s escalating trade fight with China as Dollar Tree and its massive base of low- and middle-income customers.
Late last month, President Donald Trump slapped a 10 percent tariff on $200 billion worth of Chinese imports. Unlike previous rounds of tariffs on Chinese products, which largely taxed industrial goods, the new duty touches everyday consumer items. That’s the sweet spot for the Chesapeake, Virginia-based Dollar Tree, which owns 15,000 Dollar Tree and Family Dollar discount variety stores across the U.S., and may soon need to pull items off shelves, or take other steps to offset the higher costs. The tariff may also hit communities if the company pulls back on store openings and hiring.
Many of its inexpensive products can be made only in China, company executives said.
…The tariff will hit about 10 percent of Dollar Tree’s merchandise, or several thousand items, including household, health and beauty products, food, hardware and electronics, the company’s chief executive, Gary Philbin, said at a hearing before the U.S. trade representative in late August.
…While most discount store shoppers could feel the pinch, customers of the so-called dollar stores are especially budget-constrained and would be hurt by what is essentially a new tax on their purchases. And higher costs lay ahead: The new tariff is set to rise to 25 percent on Jan. 1.
…As a result, if the U.S.-China standoff isn’t resolved soon, customers are likely to see slightly less merchandise in stores, smaller packages at the same price for certain items and perhaps some higher prices at Family Dollar, Philbin said. Dollar Tree also may pull back investment and hiring in communities if its profits fall, he said.
More than 60 percent of Dollar Tree’s shoppers – at both the Dollar Tree and Family Dollar chains – have less than $40,000 in annual household income, Philbin wrote in his letter to U.S. Trade Representative Robert Lighthizer. Half of that group earns less than $20,000 a year.
“They truly are among the most vulnerable U.S. consumers,” Philbin said in the letter. At the hearing, he said they depended on the stores’ offerings “to make ends meet.”
Among the products affected by the tariffs are: vegetables, perfume, shampoo, makeup, dog leashes, handbags, paper, bed sheets, dishes, cups, carpet, batteries, clothing, hats, tweezers, screwdrivers and lamps.
…Outside a Dollar Tree in Annandale, Virginia, last week, Edgar Escobar, 48, said he shops at one of the chain’s area stores about twice a week, buying staples such as bread, soda and candy, as well as plastic containers and mirrors.
“I like it because everything is cheap,” said Escobar, a house painter. If the store carries fewer items because of the tariffs, he said he would clip supermarket coupons but still couldn’t match the deals he gets at Dollar Tree.
…The company opened 603 stores last year and has been adding more than 6,000 retail associates a year. The tariffs “put these new jobs and possibly existing jobs at risk,” Philbin said. Dollar Tree employs about 175,000 workers.