Buyers in the United States are reportedly looking for a 15–20 per cent discount on a number of products that they had ordered prior to US President Donald Trump imposing tariffs on a number of nations.
Large retailers have not changed their sourcing strategies to accommodate global operations through long-term contracts with vendors, but Indian exporters are becoming aware that their orders have been placed on hold.
Rahul Mehta, chief mentor at Clothing Manufacturers Association of India (CMAI), said that US buyers are putting pressure to absorb or share the additional cost they will have to incur for the current orders as well as those in shipment, with there being confusion among buyers and exporters on the ground.
Demand destruction is the true concern, particularly in industries like textiles where Americans are delaying discretionary purchases. The industry is worried about a downturn in new orders. According to an exporter, rising tariffs may also put strain on US purchasers’ liquidity, particularly for smaller ones, as they will have to pay higher customs duties all of a sudden.
