Zoë Schiffer: Yes it, ok. Obviously, that is meaningful for logistics. Only easier to add a fee compared to the price increase of each goods. But is it also a way to subtly put pressure on the Trump administration, or I am excessive explanation?
Louise Matsakis: I don't think you are. I think it sends a rather clear political message. That these fees are because your country has these really high tax rates. I think that is definitely a subtle message that these companies are sending. I think Temu in particular is a mystery. They do not have any operator on the Capitol hill. They rarely answer media requirements from journalists like me. It is interesting to see them that I think doing something political in this case, while most of the time they are silent or they are a policy decision that seems a bit difficult to understand.
Zoë Schiffer: As you said, for at least Temu and Shein, it is a line item right now. We do not see the price of each goods really changed at this time. But is it true on the board, or there are some special items that we should worry about?
Louise Matsakis: The items that you should find are things that really cannot be created anywhere else. Those are things like electronics, anything is plastic. A lot of things for parents. Trolley, children's equipment, children's toys, children's clothes, all of which are almost completely produced in China. These are also the types of products in which the margins are quite thin, so there are not many wiggling rooms for the manufacturer or American brand to eat itself. These are usually items somewhere from 10 to $ 30.
Zoë Schiffer: Yes, ok. Well, I won't take you into the explosion and make you talk about what you have recently reserved.
Louise Matsakis: I am very happy to share with our beloved readers that I have sent Zoë a horrific picture on another day in a number of ungainly makeup foam that I panicked and ordered on another day, because I refused to return to spend, anything, $ 11 that Sephora charged for one of these.
Zoë Schiffer: 100%. This is a bit of a axis, but I feel like you and I talked a lot about it not as simple as opening production facilities in the United States. There are many things that go to China is dominant in space. I am wondering if you can talk briefly to us?
Louise Matsakis: I think there is this story that all of these jobs left the United States and they went to China when China joined the World Trade Organization at the beginning of the century. But it is a really simple story. In fact, 20 years ago, many products we are talking about now, makeup sponges, iPhones, small electronic devices, Stanley trophies I am looking right now on my table, these products really do not exist. Not as if these supply chains moved from the US to China, but they were built entirely from the beginning in China. That includes things like machines. How do you make a spray mold to make this plastic cup from the mold? These machines have been manufactured, designed, produced and maintained in China since they were invented. It is really difficult to move the entire supply chain to the US. In China, the Government has completely organized itself around supporting this type of business. In the US, in the US, we do not have any infrastructure, even if these are the most basic things. Roads, ports and land are available to open giant factories, talented pipes. We don't have a high school you can come here to become a garment staff, which is a very popular thing in China.