Trade war sparks fears of price hikes, job losses

MG News | August 04, 2025 at 11:05 AM GMT+05:00
August 4, 2025 (MLN): President Trump’s ongoing trade war is casting a long shadow over U.S. retail planning, with the latest global tariffs set to take effect as retailers begin preparations for the Spring 2026 season.
Industry leaders warn the measures could result in higher prices, fewer product options, and potential job losses.
Steve Lamar, CEO of the American Apparel & Footwear Association, stated that the fashion industry, which makes up less than 5% of imports by value, bears over 25% of collected U.S. tariffs.
He noted that continued high tariffs, last-minute policy changes, and unclear trade requirements have created a perfect storm for retailers, many of whom are now delaying or reassessing their spring orders.
Retailers are reportedly navigating difficult decisions, raising prices, cutting jobs, or reducing product variety, while facing a six- to eight-month product cycle, as CNBC reported.
Flora founder Aabesh De shared that his company has paused the launch of a new product due to layered tariffs reaching 60%, forcing reconsideration of sourcing strategies.
With U.S.–Vietnam trade agreements capping tariffs at 20% and Chinese goods facing up to 145% tariffs, businesses are urgently seeking alternative supply routes.
Retailers are also grappling with paused product launches, sourcing uncertainties, and logistics issues, diverting focus from growth and strategy.
David French of the National Retail Federation emphasized that rising tariffs threaten to bring higher prices, reduced hiring, and weaker innovation.
He called for binding trade agreements that reduce, not raise, tariff barriers. Jon Gold of NRF warned that shipment decisions into early 2026 will be challenged by ongoing uncertainty in trade deals and tariff levels.
Xan Hood, CEO of Buffalo Jackson Trading Co., echoed concerns about labor costs and supply chain stability, stating that sourcing from the U.S. is four to five times more expensive.
Time spent managing tariff issues has now overtaken his focus on strategy and growth.
Kniffen Retail expert Jan Rogers Kniffen noted that many retailers who paused orders regretted the disruption.
While fall orders are slightly down, retailers are buying cautiously and planning to chase demand rather than overstock. Retailers are also increasingly pulling back from sourcing in China.
Despite the disruptions, consumer demand remains steady.
Back-to-school spending is reported as stronger than expected, and analysts like Kniffen remain optimistic that leading retailers such as Walmart, Costco, and Home Depot will navigate the tariffs better than smaller competitors.
Logistics expert Mike Short of C.H. Robinson underscored that ongoing investigations under Section 232 of U.S. trade law could bring further tariffs across sectors like copper, pharmaceuticals, and semiconductors, signaling that tariff volatility has become the new normal.
Amazon, in its latest earnings call, flagged recession fears and trade policy uncertainty as headwinds, though it pledged to absorb higher costs if needed.
As the trade war escalates, the divide between resilient and vulnerable retailers is expected to widen further.
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