Retail wipeout: Trump tariffs stoke fears of shortages and price hikes
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Lindsey Bailey/Axios
American retailers are growing worried that President Trump's trade war and increased volatility will lead to empty shelves, higher prices and store closures as Chinese imports screech to a halt.
Why it matters: Many retailers stocked up on inventory in the first months of 2025, realizing that a storm was coming — but their inventories are poised to dwindle quickly.
- The National Retail Federation expects U.S. imports to plunge by at least 20% in the second half of 2025 if increased tariffs remain in place.
- "Shortages are a real possibility," Coresight Research analyst John Harmon tells Axios.
The big picture: Trump's trade war has sent the nation's retailers into scramble mode.
- The CEOs of three of the nation's biggest retailers — Walmart, Target and Home Depot — privately warned Trump in a meeting Monday that his trade policy could trigger massive product shortages and price spikes.
- The largest companies are reportedly pressuring suppliers to absorb extra costs. "We have decades of experience" with buyers, plus longstanding supplier relationships, Walmart CEO Doug McMillon told reporters earlier this month.
- Smaller retailers have fewer options: "We're not eager to raise prices," Skechers USA CFO John Vandemore said Thursday. "We would not be doing so were it not for" the tariffs.
- Businesses that were already teetering are in serious trouble: "If they can't get goods, or their consumers revolt and don't want to pay the tariffs and their sales plummet, it seriously could push some retailers over the edge," Harmon said.
What we're watching: How fears of shortages affect consumer behavior. Several sectors have shown signs of people stocking up on products in anticipation of price increases.
- "Starting in a couple of weeks, we are just going to start running out of stuff, and if the administration waits to resolve the problem until we have shortages and hoarding, that is just too late," Sean Stein, president of the U.S.-China Business Council, told NBC News.
- The White House did not comment.
Follow the money: With higher duties and fewer supplies, prices are set to spike.
- A slew of companies have warned of higher prices or have already increased them, including Procter & Gamble, Best Buy, Unilever, Ford, Shein, Temu, AutoZone and Hermès.
- The Halloween and Costume Association warned that tariffs are threatening to "wipe out Halloween and severely disrupt Christmas unless urgent action is taken."
- "Our members are reporting a wave of order cancellations, and it's creating serious concern about whether shelves will be stocked in time for Halloween," Michele Boylstein, the association's executive director, told Axios.
Threat level: It's only April, but back-to-school season is already at risk, Coresight's Harmon said.
- Retailers will look to alternatives for product sourcing to avoid the steepest duties but "it's not like you can flip a switch and pivot to another supplier," Harmon said.
