Five Below Reportedly Refusing Orders From China

With the current trade war waging between the U.S. and China, retailers are either postponing shipments or simply canceling orders from Chinese suppliers. One major discount chain, Five Below, is reportedly refusing to take products currently waiting for shipment to the U.S. from China.

Representing Five Below, shipping company A.P. Moller-Maersk A/S has purportedly suspended Chinese shipments. According to a memo obtained by Bloomberg, loaded containers sitting and ready to leave the country must be unpacked and returned. No additional containers are to be delivered to loading docks until further notice.

“We are in close contact with our customers while they navigate a volatile and uncertain business landscape,” a Maersk spokesperson stated, without naming any specific customer, per Bloomberg.

Five Below, which sells trendy items for around $5, buys a large amount of merchandise from China. In a recent government filing, the retailer stated that a “significant majority” of its inventory comes from overseas.

It is unclear who will ultimately absorb the costs associated with the alleged refused shipments. Five Below has not made any official comments as of yet.

Trump’s Tariffs on Chinese Goods Forcing Businesses Like Five Below To Adjust

Imported goods from China are currently subject to a 145% tariff at the U.S. border. In retaliation, China has imposed similar tariff fees on American products.

As such, retailers are reevaluating import procedures and reviewing their suppliers, particularly the ones located in China. Some are considering passing extra duty charges onto consumers, while others are just halting Chinese shipments for now.

Earlier this week, it was reported that Amazon suddenly canceled wholesale shipments from China without explanation. Multiple Amazon sellers have purportedly received cancel notifications from the world’s largest online retailer. Now, these vendors are on the hook to pay manufacturers for the products as well as scramble to find new buyers.

Meanwhile, Chinese factories that produce many of the items sold in the U.S. are seeing escalating order cancellations. Speaking to The Wall Street Journal, Chen Qingxin, who operates a toy manufacturing facility in Guangdong province, expects the import-export of goods between China and the U.S. will come to a virtual standstill.

Many of the Chinese factories are currently looking for new buyers outside the U.S. Some are simply throttling down production as American orders slow to a trickle.