May 9, 2018
By Dennis Kaiser
The price tag of exiting NAFTA could reach $15.8 billion for retailers. A new study authored by A.T. Kearney, a global strategy and management consulting firm, quantifies the impact of a potential U.S. withdrawal from the treaty, and outlines what changes retailers should expect in the event that the country exits from the pact.
The report titled, “How NAFTA Affects US Retail,” detailed how the American retail landscape is in danger of being undercut. It quantified direct and indirect margin impact across all sectors of retail, including food and beverage, electrical and appliances, pharma, auto parts, household goods, and apparel and footwear.
A.T. Kearney’s Johan Gott, co-author of the study, says, “The three macro areas we researched were tariff increases, reduced consumer spending, and lost jobs, each and collectively amounting to losses of billions of dollars and displaced lives. Retailers in different sectors would be affected in different ways, even from product to product. But bottom line, the impact will extend to millions of products imported into the U.S.”
The retail industry imports $182 billion of goods from NAFTA partners, and the added tariffs and reduced margins would hit retailers hard. Additionally, the study quantified the impact on retail employment, projecting losses of over one hundred thousand jobs within the next three years.
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