Today we want to take a different tack: which U.S. companies import lots of goods from China, which therefore might be subject to the Trump Administration’s new tariffs? 

This is not easy to do, because companies aren’t required to disclose an “imports from China” line-item — but analysts can glean some telling clues, if you know where to look in the disclosures companies do make.

Our example in this exercise is Dollar General Corp. ($DG). The discount retail giant brings in nearly $40 billion in annual revenue by selling ultra-cheap goods, so lots of those items must come from China, right? 

We began by opening our Disclosures & Footnotes tool and searching for “China” in the company’s 2023 Form 10-K. To no surprise, we immediately found references to China in Dollar General’s earnings release and the Risk Factors footnote; no surprise there.

Then we noticed another hit, in the Subsidiaries disclosure. See Figure 1, below (which is only a truncated list of the many, many subsidiaries Dollar General has).

All SEC filers must disclose a list of significant subsidiaries as part of their 10-K filing, to help investors understand the overall structure of the firm. Some companies disclose lots of subsidiaries; some disclose only a few, or none at all if they don’t have them.

Dollar General disclosed two subsidiaries based in China: something called Dolgen V and another called Dollar General Global Sourcing Co., based in the Chinese port city of Shenzhen.

Those two entities are, in tandem, Dollar General’s sourcing arm in China. In two footnotes at the end of the subsidiaries list, Dollar General discloses that Dolgen V is a business trust that serves as the sole investor in the operating company Dollar General Global Sourcing.

So now we know Dollar General does source lots of goods from China — enough that the company bothered to establish a legal presence in country, which is not easy for a U.S. business to do in China.

Alas, we still don’t have specific dollar numbers. Like most businesses, Dollar General doesn’t disclose any breakdown of where its goods come from (that is, imported items subject to U.S. tariffs). Nor does it report any geographic segment revenue for where it sells its goods into (which would be exports subject to China tariffs), although the company does say it only operates in the United States and Mexico.

Plus, while Dollar General clearly must import at least some of its goods from China (which are subject to U.S. tariffs directly), the company also sells plenty of consumer products from manufacturing giants such as Coca Cola, General Mills, Kraft, Procter & Gamble, and Unilever, to name but a few. It’s entirely possible that those suppliers might source some of their own goods or materials from China, which will be subject to U.S. tariffs, and those companies presumably might pass along those higher costs to Dollar General. So that’s yet another way that tariffs could lead to higher costs for Dollar General, which would ultimately show up in DG’s costs of goods sold disclosure.

The Larger Picture

Speaking of other suppliers that might also be subject to tariffs, that begs the question — what other companies have subsidiaries in China? 

Lots of them, apparently. We ran that same “China” disclosure search for the S&P 500 and found 240 that disclosed subsidiaries in China in their most recent annual reports; everyone from Abbott to Zoetis. Calcbench neatly allows you to export the whole list in a spreadsheet, including date of filing and URL so you can trace back to the original source document. You can download the list from DropBox if you’d like.

Indeed, why stop at China? You could run the same analysis for Mexico, Canada, Ireland (a popular subsidiary location for pharma and tech companies) and other countries too. The answers will help you better understand where the company’s operations are, those answers can inform your questions about tariffs, income taxes, and related risks.

Financial analysts can conduct such research yourself with just a few keystrokes. Just do what we did: open the Footnotes & Disclosure database and then search “China” for the companies in your sample group. See what comes up. You’re likely to find the phrase in all sorts of disclosures that a large company makes, including the subsidiaries disclosure.

Then you can ask more focused questions of management on the next earnings call, and keep pushing until management gives you a satisfactory answer.