With a booming economy, consumer confidence hitting a record high, and unemployment reaching its lowest level in decades, the retail industry is looking back at 2018 as a banner year. As we head into 2019, the question is whether this growth and progress will continue, or if the economy will cool off because of an escalating trade war.
We certainly hope that the trade tensions between China and the United States will cool, but the uncertainty has retailers and others nervous about what 2019 will bring. The November G20 meeting provided an opportunity to defuse the situation, and we hope there will be a path forward to resolution and an eventual agreement with China. If there is further escalation and increased tariffs on Chinese imports that will need to be absorbed by retailers or passed along to consumers, then 2019 will certainly be challenging.
In addition to the China trade issue, the administration and Congress will have the opportunity to continue to shape US trade policy with consideration of the United States-Mexico-Canada Agreement, the new version of the North American Free Trade Agreement.
After the new agreement is signed by the three countries, each will have to pass it through their respective legislatures. With a newly split House and Senate, the challenge for the United States to secure quick passage has become more complex. Will either party seek more in the agreement, which could force renegotiation or a loss of votes either way?
We certainly hope that the White House and Capitol Hill can work through the issues to maintain the agreement with our closest and most important trading partners. The outcome will certainly impact other announced trade negotiations.
Despite these and other challengers, retailers remain committed to working with all of Washington to promote jobs and economic growth in 2019 and beyond.