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Will Trump and Hammond make online shopping more expensive?


New taxes from Chancellor Hammond and President Trump will create a double-whammy and raise the online prices of many goods substantially, warns e-commerce international delivery expert ParcelHero.

As Chancellor Hammond addressed the Tory faithful at the Conservative Conference in Birmingham today, the parcel comparison site ParcelHero warned that the combined impact of his proposed ‘Amazon Tax’ on online retailers and President Trump’s new tariffs on Chinese goods and materials will create a ‘perfect storm’. This will lead to soaring online prices.

Chancellor Hammond is proposing an ‘Amazon Tax’ on products sold online: meaning the cost of products to UK buyers will rise. ParcelHero’s Head of Consumer Research, David Jinks MILT, says: ‘The Chancellor’s Conference speech today was about ‘An Economy that Works for Everyone’. His response to the collapse of High Street sales is a Solution that Works for No One. Hammond’s plan to restore the health of town centre stores is the extraordinary proposal to introduce a new e-commerce tax. Why, when everyone – from large town centre retailers to the Federation of Small Businesses alike – agrees it is exorbitant business rates that are killing the High Street, he is proposing a new digital tax, is a mystery.’

Says David: ‘Mr Hammond claims that taxing online sales, the only growing sector of retail, will create a level playing field for High Street retailers. Online sales are up 14 percent this year, showing their popularity with consumers. The new tax will hit many of these shoppers hard, but it isn’t clear that this will help physical stores. And we must not forget that many High Street stores have successful web sites that would also be hit by the new tax; that will be a sucker punch to successful multichannel brick and mortar/e-commerce stores such as John Lewis. We think rather than creating a level playing field he’s digging up the pitch.’

David observes: ‘Commercial property taxes in the UK are now the highest in Europe; but the Chancellor won’t budge on them, saying they help stabilise local Government funding. It looks like, rather than cutting unreasonable business rates by funding a little more local spending, he’d rather Britain’s hard-pressed consumers dip into their pockets to pay more for online items. This would create an artificial parity between the High Street and online sales, achieved by internet buyers paying through the nose. But who exactly gains from that?’

The Chancellor has moved his Autumn budget forward from November to this month, and he may well introduce his new Amazon tax in his Statement. That would mean that, just as the new Amazon Tax looms, Donald Trump’s new taxes on imported Chinese goods will also start to impact on British shoppers, as many well-known American brands popular in the UK incorporate Chinese components.

Explains David: ‘The latest round of US tariffs is a 10 percent levy on $200 billion worth of Chinese goods, and that’s set to rise to 25 percent by the end of the year. That will impact on those US traders who source their stock from Alibaba and then sell products to the UK. More significantly still, Chinese components in well-known American branded electronics, cosmetics and clothing will also be impacted.

‘For example, Chinese manufactured nickel-cadmium batteries are used in many US electronic items. It all means that, for example, several Apple Products, such as its MacMini, will be directly affected by the new duties. And you can bet your bottom dollar – or pound – that both US and UK shoppers will bear the brunt of these new tariffs.

The Chinese retail guru Jack Ma, founder of Alibaba, thinks the row will even spread to Europe: Short term, business communities in China, U.S., Europe will all be in trouble. This thing will last long, if you want short term solution, there is no solution.” David concludes: ‘Trump’s new tariff is bad enough, but both new taxes together will create a significant double-whammy as Hammond’s new Amazon Tax kicks in as well.’

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