We're back. And it's Friday (!). Dion is still on vacation, but he makes a guest appearance in this newsletter.
Today's edition is 1,296 words, a 5-minute read...
Illustration: Eniola Odetunde/Axios
Dion Rabouin and Erica Pandey report: Big retailers like Bed, Bath and Beyond, Target, and TJX Brands are refusing to accept tariff price increases from their brand suppliers, telling the companies they will have to either eat the tariff costs or find another buyer.
Why it matters: This forces the costs of President Trump's trade war with China down to smaller businesses that can hardly afford them, while the big companies keep the impact of tariffs at bay.
The state of play: After the next round of tariffs — scheduled for Dec. 15 — is implemented, nearly every product traded between the U.S. and China will be impacted.
What we're hearing: "The material cost is more than 50% of the product, so it’s a significant cost," Dan Digre, president of Misco (Minneapolis Speaker Co.), which his father founded in 1949, tells Axios. "You start taking out 10%-15%, and it’s hard to be profitable."
What we're not hearing: Representatives from Bed, Bath and Beyond, and TJX — which includes TJMaxx, Marshalls and Burlington — didn't return emails from Axios asking for comment.
The intrigue: Small business owners who spoke to Axios say business is strong — they've got lots of orders to fill and clients to serve, so they can't reduce their workforce or cut costs to offset the tariff expenses. They are simply treading water.
Where it stands: So far, the strong economy has helped buffer small businesses against the blunt impact of tariffs: The National Federation of Independent Business' monthly "Optimism Index," a bellwether of small business sentiment, rose in October, with 25% of respondents saying that finding qualified labor was their top complaint — more than those who cited taxes or regulations.
Trade is getting more restrictive around the globe. In the six months through October, newly introduced trade restriction policies in G20 countries covered the 2nd highest amount of goods on record, according to a new report from the World Trade Organization.
Separately ... Economists at the OECD said on Thursday that “trade conflict, weak business investment and persistent political uncertainty are weighing down on the world economy and raising the risk of long-term stagnation.”
Wall Street analysts have long called for consolidation among discount brokerages, which they said needed to get bigger to lessen the blow from the race-to-the-bottom on fees.
Driving the news: Those predictions may have started to play out.
Why it matters: Charles Schwab’s decision to slash trading fees to $0 forced other discount brokerages to follow suit. But the decision was a bigger blow for TD Ameritrade and E-Trade, which depend more on commissions to boost revenue.
The tie-up between Schwab and TD Ameritrade would create a giant with over $5 trillion in client assets.
Of note: Discount brokerages got their start after the SEC abolished fixed trading commissions and allowed the creation of cheaper services than the legacy Wall Street firms that once dominated the space.
Consumers scaled back plans to buy a new car last month.
Why it matters: It may signal consumers' lack of confidence in the staying power of the U.S. economy.
But, but, but: “We are at the late stage of this business cycle. Pretty much everyone who’s wanted a new vehicle has bought one. It’s almost vehicle saturation at this point,” which might also explain the drop-off in purchase plans, Chesbrough says.
Photo via Getty Images
Bumble Bee Foods, the iconic canned seafood brand, filed for bankruptcy protection — crushed by the weight of legal expenses “stemming from its involvement in a conspiracy to fix prices on canned tuna,” as the Wall Street Journal reports.
The bottom line: Bumble Bee’s sales took a hit as consumer appetite for canned tuna waned. But ultimately its scheme with competing brands to keep prices of canned tuna artificially high — which drew a hefty criminal fine and customer lawsuits — pushed the company into bankruptcy.
Have a great weekend! ☀️ See you on Monday.