‘Silver lining’ for ASX retailers as Trump’s exec orders target Temu and Shein shipping loophole

Donald Trump’s tariffs are stripping trillions from global share markets. Not only are ultra-cheap shipments to the US under $US800 no longer tariff-free, they now incur duties of 90 per cent.

The tariff shock stripping trillions from global share markets and raising the chances of a worldwide recession has more punishment in store for Shein and Temu, the target of US President Donald Trump’s latest executive orders.

Australian retail icons tormented by the ultra-cheap Chinese e-commerce titans won’t be shedding a tear after fierce competition at the bargain end of the market resigned some apparel brands to the dustbin.

Imports to America under $US800 ($1333) will no longer be tariff-free, as of last week’s remake of the US regime. Under executive orders signed on Tuesday in Washington — amendment to reciprocal tariffs and updated duties as applied to low-value imports from the People’s Republic of China — not only is the so-called duty-free de minimis treatment no longer available, it will now incur a duty tripled to 90 per cent of the order value from June 1.

‘Silver lining’ for ASX-listed retailers as Donald Trump’s executive orders target China’s Temu and Shein shipping loophole. Picture: Nicolas Tucat/ AFP

As the retaliatory conflict worsens, it could actually offer a “silver lining” for Australian shoppers as suppliers are locked into harder bargaining with the major white goods and electronics retailers.

There also could be advantages from a significant drop in shipping container prices, as surplus containers destined for the US generates a glut elsewhere, including in shopping routes to Australia, Harvey Norman chairman and co-founder Gerry Harvey told The Australian on Wednesday.

Mr Harvey told The Australian it was too early to tell if suppliers would come to the negotiating table willing to cut deals, but certainly it would be a topic of discussion in coming months.

“That discussion will happen, and it won’t be just us, it will be every retailer doing that right across the board everywhere,” Mr Harvey said.

“We are in the very beginning of that, now whether that eventuates or what happens, who knows, and how quickly does Trump or doesn’t he reverse? I think most of us are sitting here thinking he is a deal-maker, he will reverse and do deals. But does he? Both sides have to agree, and it won’t happen overnight.”

The Harvey Norman billionaire recalled when Covid pushed shipping prices to up to $10,000 a container. Retailers are contemplating the other extreme for the first time in five years: competitive freight.

“Now you can look at it and wonder what will happen to container prices? We are watching that too, and it is more likely that it will be cheaper than more expensive.”

Kogan.com founder and chief executive Ruslan Kogan wondered whether Australia might in fact be a target market for even cheaper goods and gadgets.

That may not necessarily be good news for his Kogan.com marketplace which sells a wide range of technology and home appliances, said while the global tariffs issue was creating uncertainty it was also seeing many manufacturers scramble to find new markets to sell their products as they are priced out of the US.

“We’re already seeing suppliers and manufacturing partners divert stock and capacity away from the US, and it’s pushing prices down. With the US being the world’s largest economy and a key driver of global demand, these tariffs are leaving many factories in major manufacturing hubs like China scrambling to fill the gap, and it’s driving prices down,” Mr Kogan said.

“The next couple of months is when retailers place their large orders for the busy Christmas period, so the timing couldn’t be any better for customers who will be looking to pick up some bargains this festive season.”

Kogan.com founder and CEO Ruslan Kogan. Picture: Aaron Francis

Terry Smart, the chief executive of consumer electronics giant JB Hi-Fi, and which also owns The Good Guys and has a controlling stake in e&s, said he wasn’t hearing any feedback from suppliers yet about the opportunity for lower prices.

Meanwhile, Mr Harvey said in the last week as President Trump announced his tariffs policy and global share markets went into meltdown, he hadn’t detected any effect on turnover at his Harvey Norman stores.

“I’m checking our sales every day, because we should be getting a bit of a downturn because of the election and Trump, and that isn’t happening and that is a bit interesting. And if we aren’t getting affected, probably no one else is. Around our stores, there are no indications that anything is changing.”