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Illustration: Rebecca Zisser/Axios

There are no calm waters in sight in the U.S.-China trade fight, but even before the latest round of tariffs, the retail industry had been tumbling in a whirlpool.

The backdrop: For the past few quarters, retailers have warned analysts about the U.S.-China trade war's potential to hurt sales as tariffs push prices up and turn shoppers away. But those effects have been invisible so far because the first two rounds of tariffed products largely excluded consumer goods.

Now things are changing, with tariffs being imposed on the third and fourth "lists" of goods set out by the Trump administration.

  • Steep 25% tariffs on the third list, which went into effect this month, will affect things like instant coffee and bathrobes.
  • The fourth list includes all imports from China and will touch common consumer products like clothes and shoes.
  • Worth noting: Several types of apparel are heavily tariffed even without the additional duties, says Hun Quach of the Retail Industry Leaders Association. For example, swimsuits already face a 25% tariff and dresses, 16%.

Where it stands: In recent earnings calls, big retailers like Kohl's, Nordstrom and JCPenney have reported disappointing sales numbers and said that the impact of tariffs could make things worse.

The big picture: The threat of tariffs comes amid decades-long changes in U.S. retail that have been shuttering malls and emptying out Main Streets across the country.

The latest: Dressbarn plans to close all 650 of its stores, and Payless ShoeSource will close its 2,600 stores by July.

  • Hundreds of footwear sellers, including Nike and Adidas, sent an open letter to President Trump saying the effect of tariffs would be "catastrophic" for them.
  • Even the retailers reporting strong growth, such as Macy's and Walmart, said tariffs will likely drive prices up.
  • As many as 12,000 store closures could happen this year if tariffs become a tipping point for smaller or struggling retailers, writes UBS analyst Jay Sole.

The bottom line: "This last round of tariffs, should it occur, is going to be a big challenge," said Mike Zuccaro, an analyst with Moody's.

Go deeper: The world can't afford a trade war right now

Go deeper

Neera Tanden withdraws nomination for Office of Management and Budget director

Neera Tanden testifying before the Senate Budget Committee in Washington, D.C., in February 2021. Photo: Anna Moneymaker/The New York Times/Bloomberg via Getty Images

Neera Tanden withdrew her name from nomination to lead the Office of Management and Budget after several senators voiced opposition and concern about her qualifications and past combative tweets, President Biden announced Tuesday.

Why it matters: Tanden’s decision to pull her nomination marks Biden's first setback in filling out his Cabinet with a thin Democratic majority in the Senate.

What's ahead for the newest female CEOs

Jane Fraser (L) and Rosalind Brewer. Photos: Jason Redmond/AFP via Getty Images; Rodrigo Capote/Bloomberg via Getty Images.

The number of women at the helm of America’s biggest companies pales in comparison to men, but is newly growing — and their tasks are huge.

What's going on: Jane Fraser took over at Citigroup this week, the first woman to ever lead a major U.S. bank. Rosalind Brewer will take the reins at Walgreens in the coming weeks (March 15) — a company that's been run by white men for more than a century.

3 hours ago - Health

Biden says U.S. will have enough vaccines for 300 million adults by end of May

President Biden. Photo: Anna Moneymaker-Pool/Getty Images

President Biden on Tuesday said that ramped-up coronavirus vaccine production will provide enough doses for 300 million Americans by the end May.

Why it matters: That's two months sooner than Biden's previous promise of enough vaccines for all American adults by the end of July.