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<div type="image" title="For the unversed, trading in futures and options can be akin to setting their hard-earned money on fire" height="900" width="1200" msid="114064202" hostid="261" caption="&amp;lt;p&amp;gt;For the unversed, trading in futures and options can be akin to setting their hard-earned money on fire&amp;lt;/p&amp;gt;"></div> Once upon a time, there thrived a wild, wild land. Here, it was all about super high monetary stakes, lightning-fast trade deals, and bucketloads of money shifting hands every single second. This wilderness lured millions of individuals with the promise of super duper high returns. But, at what cost? Welcome to the unforgiving, ultra-risky wild west of <keyword id="19991165" type="General" weightage="20" keywordseo="Indian-equity-markets" source="keywords">Indian equity markets</keyword> called the <keyword id="145718" type="General" weightage="100" keywordseo="Futures-and-Options" source="Orion">futures and options</keyword>. Here, everyone seems to just fly right through the bright red-flagged warnings of financial risks to earn even a fraction of these promised returns. Most burn themselves in the process, but carry on nevertheless, as if nothing ever happened. <h2>Chasing the cloudy profits</h2>The data conclusively proves that every 9 out of 10 individuals only lost their hard-earned money in this land. But hey, what do the numbers know? Some hide their losses out of shame, some out of fear. The proponents, meanwhile, proudly boast unusually high returns on their investments, some open social media channels while others encourage their friends and family to take the plunge. Naturally, news of this unstoppable and humongous en-masse migration to the F&amp;O (futures and options) town has reached sheriff <keyword id="19901201" type="General" weightage="20" keywordseo="SEBI" source="keywords" meta.keywordsubtype="org" meta.entityname="SEBI" meta.hostid="261" meta.entityid="SEBI">SEBI</keyword>, galvanising them into action. After all, it was time to put a leash on this madness and save the common man. The inhabitants of this town doubled in the last 2 years, from 51 lakh in FY22 to 96 lakh in FY24—99.8% of whom were small and mid-income traders. But profits? Well, that's a different, rather completely absent story. <h2>Que Sera Sera, much?</h2>A recent report by SEBI (Securities and Exchange Board of India) that studied profits and losses made by traders in the equity derivatives segment between FY22-24 exposed the mad mania of futures and options trading in India, especially since the pandemic. Per the report, 91.1% of individual traders, or about 73 lakh traders had only lost money trading in futures and options in FY24. Between FY 22-24, over 1 crore traders, or about 92.8% of individual traders, had lost Rs 2 lakh each. But once bitten, twice shy? Well, not in this case. More than 75% of individuals, who had only made losses trading in F&amp;O in FY22 and FY23, continued to trade vigorously in FY24 as well, without any changes in the bottom line, which remained deep in red and negative. So, then all these traders must be uber-rich, with tons of cash and not much care to spare? Nope. 76% of traders in the F&amp;O space in FY24 had an annual income of less than Rs 5 lakh. 2 years ago, their share stood at 71%. And their choice of poison? Options! In FY24, 60% of traders made losses trading in futures, but a whopping 91.5% burnt their funds trading in options. Mind you, futures are riskier than options. With futures, which require significant capital investment, the buyer and seller both are contractually bound to adhere to the pre-determined strike price of the futures or options contract, irrespective of whether the prevailing prices are higher or lower (and thus, resulting in losses for either the buyer or seller). With options, since this adherence ain't necessary, individuals end up taking debt to take highly leveraged positions while trading here. <h2>Scale of the explosion</h2>Anyone who trades even infrequently will tell you that a demat account is the mitochondria or powerhouse of the trading cell. As of August 2024, India had over 17.1 crore <keyword id="20957284" type="General" weightage="20" keywordseo="demat-accounts" source="keywords">demat accounts</keyword>, which are a prerequisite for trading in the markets. India is the 9th biggest country in the world, in terms of total demat accounts. Did you know that our demat accounts are at par with the entire population of Bangladesh? Talk about scale! Just 4 years ago, in March 2020, this number was a mere 4 crore. Naturally, the total F&amp;O turnover on both <keyword id="20004725" type="General" weightage="20" keywordseo="NSE" source="keywords" meta.keywordsubtype="org" meta.entityname="NSE" meta.hostid="261" meta.entityid="NSE">NSE</keyword> and BSE has hit the roof, and also broken it. As of October 4, 2024, the total futures and options turnover on NSE stood at a massive Rs 4,78,27,27,750.30 crore. Good luck counting the thousands! <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total Turnover (Both Futures and Options) (In Rs Crore) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2020-21 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">64,36,03,951.51 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2021-22 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,69,52,33,134.47 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2022-23 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3,82,23,26,468.06 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2023-24 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7,99,27,67,152.43 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source : NSE Another metric that underlines the meteoric growth of trading in India is the collection of STT or <keyword id="20930760" type="General" weightage="20" keywordseo="Securities-Transaction-Tax" source="keywords">Securities Transaction Tax</keyword>. As of September 2024, India's STT mop-up had gone past Rs 26,000 crore. Traders have to pay STT whenever they buy or sell any security in the market. So, more trading brings in more STT, and hence, more revenue for the government, so they're not really complaining. After all, this is certainly what they'd call enviable growth. As of August 2023, our STT collection stood at about Rs 21,599 crores. And in FY20-21, India's STT collection had been Rs 16,000 crore. If only our salaries also managed to grow at this rate! <h2>So, what's happening?</h2>Two things. One, it's the big bulls who are raking in all the moolah. And it's the younger lot (those aged under 30) who are propping them up for this. In FY24, 43% of individual traders in the market were less than 30 years of age. In just one year, this number has swelled by 12 percentage points from just 31% of individual traders. But who says ageing is bad? Wrinkles and silver hair seemingly have a propensity of incurring lesser losses in the market. In FY24, only 79% of traders aged above 60 years made losses, as compared to 93% of those aged below 30. Small and mid-income traders, which make up 98% of the total trader base, witnessed average losses per person of Rs 65,000 and Rs 1.5 lakh in FY24 in futures and options, respectively. The winner here? Clearly, the big bulls, who declared an annual income of over Rs 1 crore, ended up with average profits of Rs 96,000 per person this year. <h2>What’s the sheriff up to?</h2>The government has finally swung into action, hiking the STT rate for F&amp;O during this year’s budget. Effective October 1, 2024, the STT on futures stands at 0.02%, up from 0.0125%. For options, it was upped to 0.1% versus 0.0625% previously. Small margins, but huge impact oncoming. Says Puneet Sharma- CEO and Fund Manager at Whitespace Alpha, “SEBI aims to enhance market stability while safeguarding investor interests, reflecting the regulator's intent to balance risk management with market participation”. But this might come with its own share of challenges, too. “Stricter norms around leverage, transparency, and capital adequacy could limit the ability of investors to determine their own risk appetite, thereby stifling innovation in trading strategies. Over-regulation in an environment that thrives on strategic flexibility and creativity could dampen the market’s dynamism, affecting India's competitiveness in the global derivatives landscape”, he observes. SEBI recently came out with a set of guidelines that aim to thwart <keyword id="19972907" type="General" weightage="20" keywordseo="retail-investors" source="keywords">retail investors</keyword>' participation in futures and options and hinder them from taking undue risks. Here's a quick recap of what's to come for the residents of the F&amp;O town Margin Requirements: To battle the high volatility and chaos which is generally seen on expiry days(i.e the last mandated date, post which an option becomes invalid), SEBI will put in place an extreme loss margin (ELM) of 2% for all open short options on the day of expiry. Translation? Traders will need to pony up more cash upfront, leaving them with fewer funds to take on risky bets. It ain't a choice: No more of one expiry every single day! Going ahead, an exchange like BSE or NSE will just be able to offer weekly expiries, that too, only on one benchmark index, as opposed to an entire buffet it currently offers. At present, NSE offers weekly options contracts for its financial index, bank and midcap indices. But say goodbye to this, and hello to derivatives on only 1 index per exchange. Raising the bar: Effective November 30, 2024, the minimum contract value for index derivatives will be upped to Rs 15 lakh, from the present Rs 5-10 lakh. The hope is that by making it ultra-expensive to enter these trades, investors will be dissuaded from taking on risky trades. Pay upfront: Starting February 2025, those trading in options will have to pay the entire options premium upfront, even before their trades are executed. This is because options generally carry very high leverage, and paying a significant sum upfront can force traders to think twice. Invigilation Pro Max: Starting April 1 2025, to make sure that the number of positions for equity index derivatives does not slyly slip over the mandated limit, especially on expiry days when trade volumes are huge, the exchanges will have to take a minimum of 4 position snapshots randomly. The question is, will these injections of sobriety be enough to calm down the steroid-fed bull of the futures and options market in India? Well, only time and market turnover will tell! For more insights into the financial markets and business news, stay tuned to our site and social media handles. And don’t forget to subscribe to Business Insider India’s newsletters for your weekly dose of Simply Put! Disclaimer: The content on this website is for informational purposes only and should not be construed as investment advice. We recommend readers consult certified, qualified and registered advisors for professional and personalised financial advice.

SIMPLY PUT: SEBI is on a mission to take on the wild, wild west of futures and options in India. Here’s why, what, and how

Boost in domestic <keyword id="19914449" type="General" weightage="20" keywordseo="manufacturing" source="keywords">manufacturing</keyword> due to PLI (production linked incentive) schemes and increase in <keyword id="19916774" type="General" weightage="20" keywordseo="exports" source="keywords">exports</keyword> on account of free trade agreements are expected to bridge the country's <keyword id="20201391" type="General" weightage="20" keywordseo="trade-deficit" source="keywords">trade deficit</keyword> further, <keyword id="20613906" type="General" weightage="100" keywordseo="Economic-Survey" source="keywords">Economic Survey</keyword> said on Monday. However, it said that fluctuations in <keyword id="19936629" type="General" weightage="20" keywordseo="commodity-prices" source="keywords">commodity prices</keyword>, especially for critical imports like oil, metals, and agricultural products, can impact India's trade balance and inflation levels. The Survey said that though ongoing geopolitical headwinds impacted India's merchandise exports, lowering international commodity prices ensured a lower trade deficit in FY24 than in FY23. The country's merchandise trade deficit narrowed to USD 240 billion in 2023-24 from USD 265 billion in 2022-23. It added that changes in trade policies by major trading partners or geopolitical developments can affect India's export opportunities and market access. "In the coming years, India's trade deficit is expected to decline further as the <keyword id="19981334" type="General" weightage="20" keywordseo="PLI-scheme" source="keywords">PLI scheme</keyword> is expanded and India creates a globally competitive manufacturing base in several product categories," the Survey said. It added that the recently signed FTAs (free trade agreements) are expected to increase the <keyword id="22374533" type="General" weightage="20" keywordseo="global-market-share" source="keywords">global market share</keyword> of the country's exports. The PLI scheme for sectors like mobile manufacturing, information technology (IT) hardware, pharmaceutical, telecommunications, and food product are helping to increase manufacturing and cut imports. India has implemented <keyword id="20000557" type="General" weightage="20" keywordseo="FTA" source="keywords">FTA</keyword> with Mauritius, Australia and the UAE. It added that a narrowing merchandise trade deficit and rising service exports have improved the CAD (<keyword id="20054874" type="General" weightage="20" keywordseo="current-account-deficit" source="keywords">current account deficit</keyword>), ending with a surplus of 0.6 per cent of GDP in Q4 of FY24. However, the risks to the performance of India's external sector are on the downside due to the persistence of current <keyword id="19955176" type="General" weightage="20" keywordseo="geopolitical-tensions" source="keywords">geopolitical tensions</keyword> and policy uncertainty, it said. Some of the challenges listed by the survey includes fall in demand from major trading partners like the US, rise in trade cost, and volatility in commodity prices. Attacks on shipping in the Red Sea and drought in the Panama Canal have resulted in trade flows being re-routed, increasing journey time and costs. India's merchandise trade relies heavily on maritime trade, so disturbances in major shipping routes can impact its economy. "It is critical to explore what these changing paradigms mean for India. Policies need to be a mix that straddles security concerns with economic considerations," the survey said, adding India's push towards manufacturing in complex and niche sectors through schemes such as PLI and Make in India aims to balance these goals. Further, the survey emphasised on the need to focus on improving India's competitiveness in many product areas. For example, it said, India has tremendous potential in becoming a large global exporter in agricultural commodities. Fostering stronger regional trade ties and adding more markets for Indian goods will help mitigate global demand fluctuations. "In an era when global economic growth is likely to be buffeted by geopolitical tensions and protectionism, growing India's exports of goods and services will be a stiffer challenge than before," it cautioned. Commenting on this, Rumki Majumdar, Economist, Deloitte India, said that despite global uncertainties, India's exports are recording positive growth rates. "That shows the resilience of our exports amidst global uncertainties," she said, adding, "by transforming our export basket and focusing on higher margins and value addition across various sectors, India will easily achieve its ambition of USD 2 trillion in exports by 2030-31."

India's trade deficit expected to decline further: Economic Survey

<ul class="summary-list"><li>Credit card data giant Yipit has accused two former salespeople of stealing intellectual property.</li><li>The former employees took "secret information at the heart of Yipit's business" to use in their roles at MScience, Yipit says in its lawsuit.</li></ul>Carlyle-backed data giant Yipit's lawsuit against two former employees — and 10 unnamed "individuals or entities who have conspired" with them — is the talk of the alternative data industry.Alex Pinsky, who was elevated to head of sales at Yipit rival MScience this year after joining in 2022, and Zachary Emmett, who left Yipit for MScience this year to join his former colleague, stole "secret information at the heart of Yipit's business," according to the 55-page lawsuit.The suit, filed on October 16 in the federal court in Manhattan, outlines how Emmett allegedly "texted detailed information about Yipit's customers to Mr. Pinsky, uploaded some of Yipit's most sensitive files to his personal accounts, and repeatedly took disloyal actions or inactions during his last months at Yipit." In return, the suit says, Pinsky helped Emmett get a job at Jefferies-owned MScience.In total, Pinsky "solicited Yipit's information from Mr. Emmett, and Mr. Emmett provided it, no fewer than 18 times," the suit states.Pinsky and Emmett, who focused on sales to Yipit's existing hedge fund clientele while at the firm, did not respond to requests for comment. A person close to MScience told Business Insider that they are no longer at the company.Yipit and MScience declined to comment.The suit includes screenshots of what it says were text messages between Pinksy and Emmett discussing how Yipit clients approaching renewal dates could be targeted by MScience. One alleged conversation between the two starts with them discussing an unknown hedge fund client who is "maybe the biggest a hole in the entire industry.""Can be your first one," Pinsky wrote to Emmett, who had not yet joined MScience.Emmett tried to conceal the transfers of Yipit's client data when he left the company, according to the lawsuit. He renamed files with titles such as "ZEtaxes2024" to hide what they actually were and uploaded them to personal devices via the messaging platforms of Facebook and LinkedIn."These files were among Yipit's 'crown jewels,'" the lawsuit says, including an internal presentation on the company's new Apple-focused data product that outlines Yipit's "underlying proprietary methodology.""Notably, Competitor also offers an AAPL product and is Yipit's key competitor for this product," the suit reads, referring to MScience.Longtime data vendors and buyers told Business Insider that the suit had stirred up the adolescent industry because of the openness of the two former employees."Never put this kind of stuff in writing," one data sales executive told BI.Poaching old clients after joining a new firm is certainly not a new phenomenon in the data industry, these people said, but the fact Yipit has decided to publicly name the two former employees is proof that there is still a line in the sand, these industry players said."Yipit is making sure these guys don't work in alt data ever again," a data executive at a hedge fund said.

Inside the trade secrets lawsuit that has the alternative data industry buzzing

India remains highly dependent on imports for minerals critical to accelerating its <keyword id="19951336" type="General" weightage="20" keywordseo="energy-transition" source="keywords">energy transition</keyword>, with a full reliance on shipping in lithium, cobalt and nickel, according to a report released Monday. The report, published by the Institute for Energy Economics and Financial Analysis (IEEFA), said that India's demand for <keyword id="19978839" type="General" weightage="20" keywordseo="critical-minerals" source="keywords">critical minerals</keyword> is expected to more than double by 2030, while domestic mining operations may take over a decade to start producing. It stresses that India needs a carefully crafted import strategy to mitigate potential trade risks while balancing international relationships to secure these essential minerals. IEEFA's report examines five critical minerals (and their compounds) - cobalt, copper, graphite, lithium and nickel - from the perspectives of import dependency, trade dynamics, domestic availability, and global price fluctuations. The findings show that India remains largely import-dependent for these minerals and their compounds, with 100 per cent import reliance for minerals like lithium, cobalt, and nickel. "India should strive to de-risk its critical minerals sourcing by identifying new international resources and expediting <keyword id="20681115" type="General" weightage="20" keywordseo="domestic-production" source="keywords">domestic production</keyword>. A concerted effort to partner with and foster bilateral relations with <keyword id="23713985" type="General" weightage="20" keywordseo="mineral-rich-nations" source="keywords">mineral-rich nations</keyword> should be a priority for India," said the report's co-author Charith Konda, Energy Specialist, IEEFA. "The country can also explore investment opportunities in resource-rich, friendly nations, such as Australia and Chile, as well as African countries like Ghana and South Africa," he added. The report said India depends heavily on China for synthetic graphite and natural graphite and it should explore cooperation initiatives with countries like Mozambique, Madagascar, Brazil and Tanzania which are some of the highest graphite producing countries. "As part of the Global South cooperation initiatives, these countries could be favourable partners for India for <keyword id="23713984" type="General" weightage="20" keywordseo="graphite-trading" source="keywords">graphite trading</keyword>," said the report's co-author Kaira Rakheja, Energy Analyst, IEEFA. India is also highly import-dependent for copper cathodes and nickel sulphates from just two countries - Japan and Belgium. The report suggests India could look at the US, the fifth largest producer of copper in the world, to diversify its suppliers and enhance <keyword id="23714709" type="General" weightage="20" keywordseo="supply-security" source="keywords">supply security</keyword>. For minerals like lithium oxide and nickel oxide, the dependency is low on one country, but overall imports largely come from Russia and China, both countries with potential trade risks. "Developing domestic lithium refining capacity will help India integrate with the global lithium supply chain," said Rakheja. The report also notes the significant efforts that the Indian government is making to improve domestic production of critical minerals with the auctions by the Ministry of Mines and the planned Critical Minerals Mission. "The critical minerals mining block auctions can serve as an opportunity for India to focus on building refining and processing capabilities to emerge as a global value-adding hub," said Rakheja. "Government support in the form of viability gap funding and technology development will help promote such auctions and ultimately the domestic production of critical minerals. "A stable supply of critical minerals is imperative for India to achieve its <keyword id="19895602" type="General" weightage="20" keywordseo="renewable-energy" source="keywords">renewable energy</keyword> goals," Konda said. India has committed to achieving 500 gigawatts (GW) of non-fossil fuel-based electricity installed capacity by 2030. Currently, the country's renewable energy installed capacity stands at 201 GW, with solar energy accounting for 91 GW. According to another study, the fast-developing South Asian nation needs to install around 7,000 GW of renewable energy capacity to achieve net-zero emissions by 2070.

Energy transition: India remains highly dependent on imports of critical minerals, says report

<ul class="summary-list"><li>As America's grocery king, Walmart sources a high share of its products from the US.</li><li>Target, by contrast, relies more on merchandise that is often imported, such as apparel and housewares.</li></ul>For all their <a target="_blank" class="" href="https://www.businessinsider.com/walmart-and-target-are-looking-increasingly-similar-these-days-2023-12">similarities</a>, Walmart and Target have key distinctions that could spell big differences in how each would be affected by rising import costs if Donald Trump follows through with his promised tariffs."Target is actually much more exposed than Walmart because Walmart is grocery-heavy and groceries are predominantly domestic," Jason Miller, supply chain professor at Michigan State University, told Business Insider.As <a target="_blank" class="" href="https://www.businessinsider.com/walmart-grocery-sales-us-compared-kroger-albertsons-2024-3">America's grocery king</a>, Walmart US makes nearly 60% of its revenue from the grocery category and only about a quarter of sales from general merchandise.In addition, grocery as a share of sales has been increasing in recent years as the general merchandise share has declined, according to Walmart's annual report.Target, by contrast, relies much more heavily on merchandise that is often imported, such as apparel, housewares, and beauty. Food and beverage sales accounted for less than a quarter of Target's sales last year.TD Cowen retail analyst Oliver Chen told BI that Target's apparel segment presents another potential complication, as fashion is more sensitive to seasonality. That could make it more difficult to pull orders forward ahead of possible tariffs or line up new suppliers in time to still be in style."When you miss apparel timeline, you don't get it back, and Target has more apparel exposure," he said.Beyond its grocery-to-merchandise ratio, Walmart has another key advantage over Target: scale."Walmart is much bigger," Kantar analyst Gina Logan told BI. "And I'm not just talking about sales."They have a much more advanced supply chain," she added. "They have a wider range of suppliers, they have more ability to pivot and predict demand, and can use their automation and forecasting in order to react to this in a much faster, more predictive way than Target."This is not the first time the Spark has found <a target="_blank" class="" href="https://www.businessinsider.com/walmart-finding-groove-should-terrify-target-2024-5">a competitive advantage</a> over the Bullseye in the grocery aisle.When US shoppers began to cut spending back in 2023, prioritizing essentials like groceries in their weekly budgets, <a target="_blank" class="" href="https://www.businessinsider.com/walmart-sales-boom-target-slides-as-shoppers-shift-to-groceries-2023-8">sales at Walmart chugged along while Target struggled</a>.Target has since found success by taking a much more <a target="_blank" class="" href="https://www.businessinsider.com/target-lowers-prices-battles-walmart-customers-shopping-for-deals-2024-5">Walmart-like stance with price cuts and bargain brands</a>, and its share of grocery sales has increased by 1-2 percentage points per year over the last three years.Logan says tariffs, if announced by the Trump administration, would likely push Target harder into the grocery game, especially with its portfolio of private-label food brands.Target and Walmart both report earnings next week. Walmart declined to comment for this story, citing the quiet period, and Target did not respond to BI's request.The last time the companies' executives discussed tariffs on earnings calls was in 2019, according to data from AlphaSense.At the time, Walmart said it would not raise prices on food impacted by tariffs and would instead look to offset the cost elsewhere."As a guest-focused retailer," Target CEO Brian Cornell said in May 2019, "we're concerned about tariffs because they lead to higher prices on everyday products for American families."He later said in a November call that then-President Trump's tariffs were amounting to $50 million to $60 million in added costs per quarter, adding that "obviously we're all facing the same tariff issues together."But as Target's and Walmart's financials show, not everyone is likely to be impacted by potential tariff increases to the same degree.

Here's why Target is more exposed than Walmart to the sweeping trade changes that Trump promised

<div type="image" title="Are Indians depositing less money in banks, or more in mutual funds? Turns out, it&amp;#39;s neither of those." msid="113663806" hostid="261" sizebytes="1121785"></div> Over the past few months, there’s been a lot of brouhaha about the lagging pace of <keyword id="20202062" type="General" weightage="20" keywordseo="bank-deposits" source="keywords">bank deposits</keyword> in India. Simply put, the rate at which Indians are depositing their hard-earned money in banks has been falling constantly, and some blame the increasing financialisation of <keyword id="20751315" type="General" weightage="20" keywordseo="household-savings" source="keywords">household savings</keyword> in the country or the rising preference of Indians towards <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword> and shares. So, the hypothesis is that people are choosing to invest more in mutual funds and the Indian <keyword id="19949641" type="General" weightage="20" keywordseo="equity-markets" source="keywords">equity markets</keyword> through direct investments, IPOs, or NFOs, the money flowing into Indian banks in the form of deposits is slowing down. But is that really the case? <h2>A crisis or a phase?</h2><keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords" meta.keywordsubtype="org" meta.entityname="RBI" meta.hostid="261" meta.entityid="RBI">RBI</keyword> data suggested that for the quarter ended June 2024, bank deposits grew at 11.7%. On the other hand, credit growth has outpaced this at 15%. This means that the outflow from banks as loans is far greater than the inflow into them in the form of deposits in Q1 of FY 2024-25. The situation largely saw cut-copy-paste in the first week of September as well, with loans registering a 13.3% YoY growth during the period, while deposits rose only 11.1%. This gap has only been widening for the last 3 years. Since deposits are how banks gather assets to further lend and earn interest income as a consequence, even a slight dip could set the alarm bells ringing for banks, and rightfully so. And truth be told, mutual funds are indeed taking on bank deposits in a big way. Per a report by Franklin Templeton, in August 2024, the AUM (assets under management) of Indian mutual funds, or the total funds managed by them, stood at 31.3% of total bank deposits in the country, up from 24.20% during the year-ago period. As of August 2024, the AUM of mutual funds stood at Rs 66.17 lakh crore, an all-time high. But all said and done, is this really the reason why the rate of bank deposits is falling behind? SBI has dismissed this to be a “statistical myth”, and experts point out that since equity and fund houses also keep the cash in their respective bank accounts, there’s no cause for concern. So, is financialization really to be blamed for the trailing tempo of deposits? Or is something else happening behind the scenes? We take a closer look: <h2>First, are household deposits really slowing down? And is that a cause of concern?</h2>Data from Motilal Oswal suggests the contrary. Deposits grew by around 10.4% between March 2020 and August 2024. Data from RBI also highlights that as of August 9, 2024, bank deposits witnessed a YoY growth of 10.8%. The loan-to-deposit ratio for the retail segment, which indicates what percentage of its total deposits the banks lend out as loans, has stayed at 77.5%, above the 77% mark for the tenth straight month. <div type="image" title="Yes, household deposits (as % of total deposits) have dipped, but the drop is far from significant" msid="113663882" hostid="261" sizebytes="306706"></div> Also, we can’t forego the fact that the share of Indian households in bank deposits has indeed slowed down. However, data from Axis AMC shows that the dip is marginal—from 63% in 2022 to 62% in 2023 and 61% in 2024. What has slowed down even more considerably is the share of government deposits in the aggregate bank deposits, which has dipped from 14% in 2018 to 9% in 2024. So, it's not just household deposits, you see. Moreover, as of March 2024, the collective CASA ratio (current and <keyword id="114757" type="General" weightage="20" keywordseo="savings-account" source="Orion">savings account</keyword> deposits) of all commercial banks in India stood at 41.00%, down from 43.1% in March 2023 and 45.2% in March 2022, marking a nearly 5% point decline over the past year, while still staying over the 10-year average of 39.2%. This implies that Indian banks are relying more on higher-cost funds (savings accounts), which can limit their profitability. <h2>What is this financialisation of savings we are talking about?</h2>Then again, there is no doubt about the growing affinity of Indians towards mutual funds and stock markets. Recent data from CBDT (Central Board of Direct Taxes) highlights that India’s net direct tax collection surged by around 22%, driven exclusively by the significant uptick in the collection of Securities Transaction Tax (STT), which doubled to Rs 26,154 crore, from Rs 13,352 crore in the year-ago period. Why does this matter? STT is levied when you buy or sell equity shares on stock exchanges, sell <keyword id="6361918" type="General" weightage="20" keywordseo="equity-mutual-funds" source="Orion">equity mutual funds</keyword>, and trade in futures and options in the equity segment. Such taxes, including the multiple other taxes in equity market investments, are considered as leakages as the money moves out of the economy into government coffers. Data from a ValueQuest report explains that over the last 20 years, the markets have handsomely rewarded the investors, generating over $900 billion in incremental value for them. This is the major driver behind the dramatic rise in investment flowing towards the equity markets. There’s further proof of this budding romance, if you check the demat pudding. The number of demat accounts, which are a primary requisite for participating in the stock markets, also burgeoned by 42.3 lakh in August 2024, taking India’s total tally of demat accounts beyond 17 crore. To put this in perspective, this is almost equivalent to the population of just 8 nations in the world, including China, the US, Brazil and more. Vivek Iyer, Partner, Grant Thornton Bharat thinks it's rather important, as well. “Financialisation of household savings in India is an indication of deepening capital markets in the market, especially from a retail investor standpoint. Bank deposits with a modest rate of return are no longer the only option for savings for investors. Investors today have more avenues for wealth creation in the form of public capital markets, which have democratized wealth creation and provided equality of opportunity to retail investors”, he says. Yes, Indians are investing more and more in the markets, and in mutual funds. But is it a sin to look out for inflation-beating returns, which the stock markets offer, and vanilla bank deposits don't? After all, the allure of 12-13% annual returns offered by <keyword id="45369" type="General" weightage="20" keywordseo="equities" source="Orion">equities</keyword> can certainly pale the stability offered by good old deposits, which generally do not go beyond 9% when it comes to annual returns. But all of this is not what is behind the slowdown. India is still a toddler in the school of savings financialization, with less than 10% of the population holding a demat account, and less than 5% of us saving in equities. That's a drop in the ocean of deposits, far inadequate to trigger a tsunami. <h2>Tell me why lagging deposits have nothing to do with Indians investing more in mutual funds!</h2>Says Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited, “Households' equity holdings composition grew from 11.1% in FY 23 to 14.7% in FY 24. This trend reflects a growing awareness of investment options, empowering individuals to take control of their financial futures. Despite this transition towards equities, banks still hold a significant share of household financial savings—33.5% in FY24 compared to 34.9% in FY23”. Also, household savings and their subsequent financialization do not have much to do with deposit creation, which is entirely made by banks. What actually drives increased deposits is credit growth or increased lending. When interest rates are eased, people tend to borrow more and spend more, which circulates more money in the economy. For the past 4 years, RBI has been tightening the screws on interest rates, which raises the cost of borrowings, and makes it more expensive to take loans, putting a dampener on credit growth, but effectively curbing inflationary pressures. The last time RBI cut the repo rate by 40 basis points was back in May 2020, 4 years ago. The lag in <keyword id="19998084" type="General" weightage="100" keywordseo="deposit-growth" source="keywords">deposit growth</keyword> we’re witnessing is almost 3 years old. Coincidence much, or just good old economics at work? But with the Fed recently setting a rate cut precedent by slashing 50 bps off its interest rate, RBI is expected to follow suit in the next MPC (Monetary Policy Committee) meeting, scheduled for November 2024. A rate cut would ease the aforementioned high cost of borrowing, and increase loan-taking for corporates and institutional investors, thereby stoking consumption in the economy. And then, deposit creation in banks is likely to return to its former glory. If not, then that would be a curious case to unravel! But that worry is for another day. Do you have insights or personal experience to share on your personal finances or money? Contact us at <a target="_blank" class="c-link" href="mailto:businessinsider@timesinternet.in">businessinsider@timesinternet.in</a>.

Simply Put: A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

<ul class="summary-list"><li>Some shoppers and businesses are stockpiling goods to avoid potential price hikes from tariffs.</li><li>President-elect Donald Trump has proposed sweeping tariffs on imported goods.</li></ul>Kristen Hull bought a new car last weekend.The 38-year-old accountant had been planning to do it in six months. But following Donald Trump's <a target="_blank" href="https://www.businessinsider.com/how-trump-won-election-high-prices-cost-of-living-unemployment-2024-11">presidential election victory</a>, Hull heard that car costs could surge if his <a target="_blank" href="https://www.businessinsider.com/cost-expensive-goods-price-impact-presidential-election-scenarios-trump-harris-2024-10">tariff plans</a> are enacted."I was just thinking, if not now, maybe in six months it might be way out of my price range," Hull told Business Insider. She's also looking into buying a new laptop and stocking up on winter clothing."I'm really concerned about the cost of things, and so I just went ahead and took the jump."On the campaign trail, Trump proposed a 60% tariff on imports from China and 10% to 20% on goods from other countries. It's still unclear how and when he will <a target="_blank" class="" href="https://www.businessinsider.com/trump-tariffs-higher-inflation-fed-interest-rates-taxes-mortgage-rates-2024-11">enact the tariffs</a> and how big he will go."Companies have made clear in many cases that they will pass the higher prices on to consumers," said Indi Dutta-Gupta, a fellow at both Georgetown University and the Roosevelt Institute, a left-leaning think tank.Firms, including AutoZone and Columbia Sportswear, <a target="_blank" href="https://www.businessinsider.com/companies-raising-prices-trump-tariffs-inflation-goods-getting-more-expensive-2024-11">have already indicated</a> they will raise prices if tariffs are enacted.Some shoppers and small businesses told BI they are also preparing. <a target="_blank" class="" href="https://www.tiktok.com/@antiplasticlady/video/7435678703147076910?amp%3Bt=1731358479116&amp;q=tariffs%20under%20trump">TikTok videos</a> recommending viewers stock up on certain goods like hair, makeup, and clothing products are racking up thousands of views, and panicked comments.Karoline Leavitt, a Trump-Vance transition spokeswoman, told BI, "Trump instituted tariffs against China that created jobs, spurred investment, and resulted in no inflation."Considering the larger scale of Trump's proposals this time around, trade experts have identified goods, including car parts, apparel, and electronics, as <a target="_blank" class="" href="https://www.businessinsider.com/how-trump-tariffs-will-impact-prices-technology-clothes-appliances-furniture-2024-11">products at risk of getting more expensive</a> under Trump's tariff proposals."It's going to be a big shift if that does come to fruition," Hull said. "We pay tariffs on some things anyway, but the talk of the massive increase is a little bit alarming to me."<h2 id="55855a54-34f3-4348-894e-b4b4454ea037">Adopting "prepper" methods and stocking up on groceries</h2>One 42-year-old mother of three in Southern Indiana, whose identity is known to BI but withheld over privacy concerns, is leaning back into her prepper roots. Before the pandemic and Trump's second run, she tried to forget the "craziness" of her old-school <a target="_blank" class="" href="https://www.businessinsider.com/what-are-doomsday-preppers-why-are-they-right-wing-2019-8">doomsday prepper</a> background. She was raised by "one of the original conspiracy theorist guys who had serious distrust of the government," she said.But she's leaned back into it. She estimates that her family has spent upwards of $2,800 to $3,000 slowly preparing and stockpiling goods, including everything from buying meats from a local butcher and deep-freezing them to dehydrating food for a longer shelf life. She got started early: As soon as she had a "gut feeling" Trump was running again, her family began their slow stockpile."We aren't like the ones you used to see on Discovery Channel with bunkers and huge stashes of stuff, but we have enough to get through 3-5 years at least of hard times," she said.Dutta-Gupta said it's reasonable for families to want to stock up on imported goods, as trade wars and tax changes could reduce incomes and raise the cost of living.Marissa Garcia, 38, said she didn't pay much attention to tariffs prior to the election.After Trump's victory, she said, "I started making a list of the potential items that could be affected, and then narrowing them down to the actual things that would affect my family, the things that I would be sad about if we couldn't afford next year."She said that the week after the election, she "went to the store and made my first of hopefully many shopping trips to start stocking up on them."Items on Garcia's list include frozen fruits and vegetables, garlic, coffee, tea, and bread, all of which would be subject to tariffs. She also said she's planning to stock up on hygiene supplies like sanitizer and masks. These purchases are costing around an additional $50 on her grocery trips, and although money is tight — she got laid off last year and is freelancing as she looks for a permanent role — she said she anticipates an even greater financial strain under Trump's proposed policies.An <a target="_blank" class="" href="https://www.americanprogressaction.org/article/trumps-tariff-would-cost-the-typical-american-household-roughly-1500-each-year/">analysis</a> from the left-leaning Center for American Progress found that Trump's tariff plans would cost the average household an extra $1,500 a year, and the nonpartisan Peterson Insitute <a target="_blank" class="" href="https://www.piie.com/sites/default/files/2024-09/wp24-20.pdf">estimated</a> that Trump's proposed 60% tariff on Chinese goods would boost inflation by 0.4 percentage points in 2025.Garcia said that learning of those estimates alarmed her. "My family cannot afford that. This year was rough enough, and that was really surprising and also just a scary feeling," she said.<h2 id="d8a08791-1bb1-4d36-b97a-e72031c68494">Small business owners are trying to stock up, too</h2>Worries about potential tariffs are already taking a financial toll on Beatrice Barba, 39, who owns a small business that produces plastic-free cups.Barba said she imports most of the materials she needs to produce her cups from China. She's considering purchasing a year's worth of inventory now, which she estimates would cost up to $200,000 plus the price of additional warehouse space.She said taking that risk is worth it because she wants to do everything she can to ensure she does not have to raise the price of her goods down the road.As a longer-term solution, she's working with a developer to build a health advice app — a business she plans to prioritize because an app would not be subject to tariffs.Lisa Evans, a 43-year-old salon owner in Jacksonville, Florida, is examining where her products are sourced. Even hair color dyes manufactured in the US might contain ingredients from abroad, and their prices could surge.Much of the hair in already-costly extensions is sourced from China, and she worries how much more expensive that will get. At this point, she's focusing on padding inventory going into the next year."It's like hope for the best, but prepare for the worst," she said.Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, told BI that even though it's still unclear what exactly Trump will implement, it's not a bad idea for both companies and consumers to prepare for any impacts."We're in a very different economy now than when we were back in 2018 when the initial China tariffs were put in place, and the scale and scope of what is being proposed is going to impact everything," Gold said. "Unfortunately, companies aren't able to absorb all of that, so they're going to have to pass on some of those costs to consumers."Javon Ford, a 30-year-old chemist in Los Angeles, said that tariffs can create a "roadblock" to procuring raw materials. Ford is considering stocking up on color pigments for cosmetics and is gearing up to contact suppliers and order materials before January 2025. But it's impossible to stock up on everything or know what might be in demand over the next four years — so tariffs could still mean adjusting prices to keep profit margins consistent.With so much uncertainty regarding Trump's tariff proposals, it's difficult to plan. For Hull, the recent car buyer, all she said she can do is budget and hope she's prepared for if and when higher tariffs come."It's mostly just waiting to see what happens," she said, "and just trying to get my savings account back up a little bit."Are you stocking up on goods or changing your spending habits because of potential tariffs? Contact these reporters at <a target="_blank" href="mailto:jkaplan@businessinsider.com">jkaplan@businessinsider.com</a> and <a target="_blank" href="mailto:asheffey@businessinsider.com">asheffey@businessinsider.com</a>.

Meet the Americans stocking up on cars, skincare, and toilet paper ahead of Trump's potential trade restrictions

<ul><li>STT increased on futures and options trading </li><li>Changes in <keyword id="22258595" type="General" weightage="20" keywordseo="TDS-rates" source="keywords">TDS rates</keyword> (from 5% to 2%) on payments for life insurance policy, brokerage </li><li>Buybacks to be treated as dividends for taxation purposes</li><li>Small savings account rates left unchanged for Oct-Dec 2024</li></ul>Starting October 1st, a lot is set to change with your money. From <keyword id="20852321" type="General" weightage="100" keywordseo="FO-trading" source="keywords">F&amp;O trading</keyword> (futures and options) and buybacks getting more expensive in the hands of the individual, to changes in TDS slabs for payments concerning life insurance, brokerage, and more, here's a ready reckoner for all that you need to know: 1. STT upped for F&amp;O (Futures and Options) trading This budget, in a bid to discourage retail investors from burning their hands in the highly risky F&amp;O segment, the government had proposed raising the STT (securities transaction tax) for both futures and options. Starting today, you will have to pay an STT of 0.1% on premium earned from option sales, as opposed to 0.0625% previously. As for futures, the STT is set to rise to 0.02% of trade price, up from its previous mark of 0.0125%. Notably, STT is levied every time an individual purchases or sells a security, which significantly increases its incidence and coverage. For instance, if the trading price of the futures you're selling today is Rs 1,000, you'd have to pay Rs 0.2 as STT today. Till September 30th, the STT applicable would be Rs 0.12. Similarly, for options, if the settlement price of your options contract is Rs 1,000, your STT payable today would be Re 1, which earlier stood at Rs 0.625 While this may sound super inconvenient for frequent or intraday traders, a recent SEBI study has highlighted that a staggering 93% individual traders have incurred just losses while trading in the F&amp;O segment between FY22 and FY24, with the total losses exceeding Rs 1.8 lakh crore during this period. Only a tiny 1% traders managed to rake in profits above Rs 1,00,000. Perhaps SEBI is thinking along the lines of prevention being better than cure? 2. Changes in Debit card rules for ICICI bank ICICI debit card users, who also happen to be frequent flyers, listen up! Starting today, you will be able to access the complimentary airport lounge service twice, but only if you have spent Rs 10,000 or more via your card in the previous quarter. So, suppose you've spent just Rs 8,000 between July-September 2024 via your ICICI debit card. Since this falls below the Rs 10,000-threshold, you wont be able to access complimentary airport lounge service two times between October-December 2024. 3. Changes in rules for PPF, small savings account The interest rates on various small savings schemes were left unchanged by the Finance Ministry for the upcoming quarter i.e. October-December 2024. For this quarter, Public Provident Funds (PPF) will earn you 7.1% interest p.a., while Sukanya Samriddhi Yojana (SSY) and Senior Citizens Savings Scheme (SCSS) will offer interest at the rate of 8.2% p.a. <div type="Article" hostid="261" msid="113692667" title="Attention! Here's what's changing with your PPF accounts starting 1st October, 2024" mstype="2" mssubtype="0"></div> Also, these changes in PPF accounts will kick in from today: <ul><li>Have a PPF account in your child's name i.e. a minor? This account would earn the same interest as a POSA (Post Office Savings Account) i.e. at 4% p.a. currently. Once your child turns 18, the prevailing PPF interest rate, which is presently at 7.1%, will be levied. </li><li>No more interest earning via multiple PPF accounts! Starting today, only your primary PPF account will be eligible for interest. </li><li>Are you an NRI who currently holds an active PPF account, and you have not disclosed your residency status in Form H (used to extend the tenure of your PPF account by blocks of 5 years)? Starting today, such accounts will earn zero interest. </li></ul>4. Buyback set to get more expensive Buybacks happen when a company decides to buy back its own shares from its existing shareholders. What's in for the shareholders, you ask? The buyback price is usually higher than what is offered by the markets. You are eligible to participate in a company's buyback if you hold its shares on or before the record date that's set by the company. Starting today, buybacks will be treated just like dividends. This means starting today, the burden of tax payable on buybacks will fall on the shareholders selling the shares, and not the company. Buybacks will be taxed as per the individual's personal income tax bracket. 5. Revision of TDS rates Starting today, the TDS (tax deducted at source) on various payments you make for life insurance, lottery tickets and more is also set to change. Here's how TDS rates will look, starting today: <table class="redcator-table-advance"><tbody><tr><td>Category </td><td>Previous TDS rate</td><td>New TDS rate (Effective October 1st, 2024)</td></tr><tr><td>Payment made towards life insurance policies</td><td>5%</td><td>2%</td></tr><tr><td>Commission earned on sale of lottery tickets </td><td>5%</td><td>2%</td></tr><tr><td>Payment of commission/ brokerage </td><td>5%</td><td>2%</td></tr><tr><td>Payment of rent by certain individuals/HUF </td><td>5%</td><td>2%</td></tr><tr><td>Payment made by e-commerce operators/platforms to e-commerce participants/sellers </td><td>1%</td><td>0.1%</td></tr></tbody><tbody></tbody><tbody></tbody></table>

Attention! Here's what's changing with your PPF, F&O trading, and buybacks, starting today!

<ul class="summary-list"><li>President-elect Donald Trump proposed an up-to 60% tariff on imports from China and 10-20% on goods from other countries.</li><li>Trade and industry experts said the proposals would likely increase costs in areas like apparel and technology.</li></ul>President-elect Donald Trump <a target="_blank" class="" href="https://www.businessinsider.com/trump-tariffs-higher-inflation-fed-interest-rates-taxes-mortgage-rates-2024-11">has big plans for tariffs</a>. If implemented, Americans could see prices rise across several product categories.Some companies that produce apparel and auto parts have <a target="_blank" class="" href="https://www.businessinsider.com/companies-raising-prices-trump-tariffs-inflation-goods-getting-more-expensive-2024-11">already started preparing to raise prices</a> if Trump enacts his plans, and some trade experts predicted that a range of industries, including electronics and appliances, would see higher prices.Mary Lovely, a senior fellow at the nonpartisan Peterson Institute for International Economics, told Business Insider that Trump could implement his proposed tariff on China imports quickly — within the first half of 2025 — using an authority in the Trade Act, but she said it's a possibility that the president-elect will not follow through on the 60% tariff he proposed on the campaign trail. He also proposed a 10% to 20% tariff on goods imported from other countries."Nothing is taxed at 60% right now, so every sector is vulnerable to seeing higher tariffs," Lovely said, adding that she would expect a lower tariff, like 20% or 25%. There's also the question of how much of the tariff burden will fall on consumers, Lovely said, and a lot of it depends on the mechanisms Trump uses to implement the tariffs.Trump has <a target="_blank" class="" href="https://www.businessinsider.com/cost-expensive-goods-price-impact-presidential-election-scenarios-trump-harris-2024-10#imported-goods">said</a> that his tariff proposals would not impact consumer prices and would serve as a tax on other countries and boost American manufacturing. The impacts of his previous tariffs were mixed. In 2018, for example, tariffs on washing machines <a target="_blank" class="" href="https://www.nytimes.com/2019/04/21/business/trump-tariffs-washing-machines.html">caused</a> prices to rise on laundry items. The smaller 30% to 50% tariffs on imports from China that Trump implemented in his first term were not found to be inflationary, and President Joe Biden kept most of them in place."Consumers are going to be at a burden, but it may take some time for them to feel it, like a slow drip," Lovely said.Still, Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, said it's reasonable for both companies and consumers to prepare for higher prices. He told BI that companies are already concerned."Whether it's a finished good or an input to production, anything that gets brought into the country from somewhere else is going to get hit with that tax," Gold said.When asked about tariffs' impacts on inflation, Trump's spokesperson Karoline Leavitt said, "In his first term, President Trump instituted tariffs against China that created jobs, spurred investment, and resulted in no inflation."Based on analyses from economists and trade experts, here are the goods that could become more expensive for Americans under Trump's tariff proposals.<h2 id="6bd7d9e5-1349-490e-afe7-bfcfe6c706de">Apparel and shoes</h2>With Trump's proposals in place, the National Retail Federation <a target="_blank" class="" href="https://cdn.nrf.com/sites/default/files/2024-11/Estimated_Impacts_of_Proposed_Tariffs_on_Imports_11.24_0.pdf">estimated</a> that prices for apparel would increase by 12.5%, prices for footwear would increase by 18.1%, and travel goods — which include backpacks and wallets — would increase by 13%.Retailers that source more than 20% of their goods from China, including Crocs and American Eagle, are at higher risk from Trump's tariff proposals, a Bank of America research note <a target="_blank" href="https://www.cnbc.com/2024/11/06/trump-proposed-tariffs-consumer-prices.html">said</a>. The two companies did not immediately respond to a request for comment from BI on whether they are adjusting their business plans in anticipation of the tariffs.Some retailers have already announced preparations to increase prices should Trump's tariff plans go into effect. Columbia Sportswear CEO Tim Boyle said during an October earnings call that he is "very concerned about the imposition of tariffs." He later <a target="_blank" class="" href="https://www.washingtonpost.com/business/2024/10/30/companies-tariffs-trump-prices/">told</a> The Washington Post that the company is "set to raise prices" in response to Trump's plans.<h2 id="901a0f6a-c8c4-4040-adc4-f59680460559">Electronics</h2>An October <a target="_blank" href="https://shop.cta.tech/products/how-the-proposed-trump-tariffs-increase-prices-for-consumer-technology-products">report</a> from the Consumer Technology Association estimated that the proposed tariffs would increase laptop and tablet costs by 45%, smartphone costs by 25.8%, video game consoles by 39%, and televisions by 9%.China is a major supplier of electronic products, so everyday products that Americans use — like smartphones and laptops — would likely see price increases. The CTA report said that in 2023, China accounted for 87% of US video game console imports, 78% of smartphone imports, and 79% of laptop and tablet imports.While some companies could try to shift their production out of China, Gold said it's not an easy process."You can't change a supply chain overnight," Gold said. "It takes months, if not years, to be able to find a new vendor that you're comfortable with that can meet all of your different requirements, has the capacity, the skilled workforce, the infrastructure works within the country."<h2 id="4af3509a-5a51-43d4-a381-392f563c0881">Cars</h2>Major car companies import auto parts from China, Mexico, and Europe, and some executives have already warned that the industry would likely face higher prices under Trump's tariffs. Philip Daniele, CEO of auto-parts company AutoZone, said during a September earnings call that if Trump carries out his tariff plans, "we will pass those tariff costs back to the consumer.""We generally raise prices ahead of that," Daniele said, adding that prices would settle over time. "So, that's historically what we've done."Shinji Aoyama, Honda's executive vice president, said on a November earnings call that Trump's proposals will have a "big impact" not just on Honda but on other car companies like General Motors and Ford. Still, he said he thinks it would take some time for the tariffs to be imposed, and at that point, Honda might consider moving production to a country that is not subjected to US tariffs.Lovely said that auto parts are an area where a lot of production is coming from China, so it's "very reasonable" to prepare for price increases. But shifting production would present difficulties because if Trump implements his 10% to 20% universal tariff, "you don't really know if there's any safe place," she said.<h2 id="8651f485-c0c8-4b71-a554-448306a5b630">Furniture</h2>The National Retail Federation report estimated that a 10% universal tariff and a 60% tariff on imports from China would increase furniture costs by 6.4%. Specifically, the report said a $200 crib could end up costing $213 after tariffs, and a $2,000 mattress and box spring could rise to $2,128.The NRF added in its report that the higher costs would hit low-income households the hardest: "They spend twice as much of their after-tax income on furniture as high-income households."Additionally, Henrik Elm, the CFO for Inter Ikea — the group that connects Ikea stores with suppliers — <a target="_blank" href="https://www.reuters.com/business/retail-consumer/ikea-ready-potential-tariffs-under-trump-cfo-says-2024-11-08/">told</a> Reuters that the company is preparing for higher tariffs under Trump, saying that Ikea has worked to make its supply chain more responsive to changes."I think we are better equipped than we have been ever before," Elm said, adding that "of course we are not immune to changes."<h2 id="4b90402b-7b3d-4fb9-b4c4-8ce9e4ee75d4">Appliances</h2>NPR <a target="_blank" href="https://www.npr.org/2019/04/09/711001915/tariffs-complex-ripple-effects-hit-appliance-shoppers-and-makers">reported</a> in 2019 that Americans were seeing higher prices on appliances like washing machines after Trump implemented a 20% tariff on the product. The NRF report said it expects appliance pieces to rise again under Trump's higher tariff proposals with a 19.4% price increase on items including stoves, fridges, dishwashers, and blenders.Under the analysis, the price of a basic fridge would rise from about $650 to $776.Gold said it's unlikely Trump's tariffs would go into effect on day one or day two, and "it's tough to say right now at what point consumers would feel the impact.""It could also depend upon the individual companies and what their tariff mitigation plans are and how much they can try and lessen the impact on the consumers," Gold said. "Obviously, larger companies might have little more ability to do that than small, medium-sized folks who really can't absorb the impact of the tariff and would immediately have to pass on those costs."<h2 id="e555aa7a-b2a3-4f94-b3aa-dae3f12d768a">Groceries</h2>Trump vowed to lower grocery prices for Americans — during a town hall in September, he said he would lower grocery prices by restricting food imports to promote production in the US. However, his tariff plans could increase grocery prices.A <a target="_blank" class="" href="https://www.thirdway.org/report/what-trumps-tariffs-mean-for-your-trip-to-the-store">report</a> from centrist think tank ThirdWay said that Trump's tariff proposals analyzed eight common purchases that the US either heavily imports or is unable to produce domestically. Using data from the International Trade Commission, the report estimated that coffee costs would rise by $0.23, frozen beef prices would rise by $1.09, and olive oil prices would rise by $0.31.Taylor Rogers, the Republican National Committee spokesperson, previously told BI that "Trump will once again cut taxes and unleash American energy to lower prices on groceries and other goods when we send him back to the White House."

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