For months, consumers have heard from manufacturers and retailers that President Trump’s flood of new tariffs on practically all imports would cost them dearly. But that didn’t happen, and the final blow hasn’t been dealt yet.
The biggest tariffs are still being delayed
In April, Trump imposed new tariffs on almost everything the US imports, with Chinese products facing a rate of up to 145%. The stock market plummeted with the news, and Trump suspended the plan for 90 days. And when the 90th day arrived in July, he extended the pause again until this Friday, August 1st.
Meanwhile, tariffs were set at 30% for Chinese imports and at least 10% for practically the rest of the world, while the Trump administration tries to negotiate individual trade deals with each country. On Sunday, Trump shook hands with the President of the European Commission after agreeing to the terms of a new deal. Two days of US-China negotiations ended on Tuesday without a definitive agreement.
Companies stocked up products to avoid paying more
Given Trump’s long campaign in favor of tariffs, some companies started stocking products as early as last winter—in hopes of avoiding new import taxes for a while.
Best Buy rushed electronics from Asia. The American Fireworks Company, in Hudson, Ohio, stocked fireworks for July 4th, almost all made in China. Pet supplies seller Barton O’Brien, from Kent Island, Maryland, borrowed money to buy as many harnesses, collars, and other supplies from China as he could store.
“We had dog life jackets in the bathroom,” said O’Brien, whose company BAYDOG sells in hundreds of stores, told NPR in May. “Our warehouse was full. We had to rent a container and put it outside.”
Indeed, so many importers rushed their shipments that winter ports looked more like peak season—as if another Black Friday and Christmas were on the way—than the typical post-holiday lull.
“Many of the things consumers bought so far are from that first rush,” said Zac Rogers, supply chain management expert at Colorado State University, who monitors shipping and storage data. “All that came before the tariffs, which is one of the reasons we haven’t had really high costs yet.”
Importers are holding back shipments
Importers were shocked by Trump’s April announcement, which added heavy tariffs not only to China—for which they were already prepared—but also to Vietnam, Mexico, and other major trading partners.
Trump argued that foreign countries would pay his tariffs, but in practice, it was American importers who suddenly faced new charges at customs. Many responded by canceling shipments or holding them abroad until the tariff plan was finalized. And that means those more expensive imports simply haven’t arrived yet.
“Importers are scared,” said Patrick Allen, a French wine importer based in Columbus, Ohio. “They don’t know when the situation will change.”
His customers are “sitting on their hands,” said Allen, instead of placing their usual holiday orders. Pet retailer O’Brien canceled his order of dog sweaters from India. Hair clip seller Rozalynn Goodwin, from Columbia, South Carolina, halted her shipments from China.
Many companies are absorbing new costs.
Suppliers and retailers paying higher tariffs—the current 10% on most imports or 30% on Chinese ones—hesitate to pass on the full cost to consumers, worried about inflation.
“I think we raised [prices] by about 10% and absorbed the rest,” said Bobby Djavaheri, whose Los Angeles-based company Yedi Houseware imports air fryers and waffle makers from China. “It’s just impossible to pass it all on because people won’t buy the product.”
Major automakers are mostly absorbing the new tariffs as a hit to profits. General Motors reported last week that tariffs cost the company about $1.1 billion in the last quarter. Stellantis—whose brands include Chrysler, Jeep, Dodge, and Ram—says it has paid more than $300 million in tariffs and produced fewer vehicles overall to avoid paying even more.
Industry data shows car prices have risen less than usual.
Tariff delays = price delays
Trump’s 90-day summer pause gave importers a new window to stock up at predictable, lower tariffs. Indeed, the second delay to August 1st allowed many stores to stock holiday merchandise, avoiding particularly painful price hikes during the key shopping season.
Supply chain professor Rogers believes that was a Trump administration idea, since retailers needed more time to get holiday stock at lower tariffs.
“It reminded me a lot of when I assign homework due at the end of class,” he said, “and there are five minutes left, and no one is done, and I say: ‘OK, you can take it home.’ That’s sort of what happened with the tariffs and the extensions.”
But of course, not everything needed for the holidays will reach the US before August. Plus, Rogers says storage costs are rising too. In June, his data showed demand for space outstripping supply for the first time since the 2022 supply chain crisis.
Retailers slow price hikes
And that means higher prices are still expected, just more slowly or less than initially feared.
In June, inflation ticked up slightly, 2.7% from a year ago, with prices rising a bit more in tariff-hit categories: clothing, appliances, and toys.
Toy maker Hasbro announced it expects tariffs to rise further by year-end, likely with less damage than initially projected, thanks to stockpiles and delays. CFO Gina Goetter described tariff-related expenses so far as “minimal,” offset by cost cuts, budget rejigging, supplier switches, and “targeted” price hikes.
Similarly, general retail prices through June remained “broadly stable, with limited tariff impact,” according to data firm Circana. But if Trump follows through on higher tariffs in August, Circana warns of looming hits to heavily imported goods like shrimp, tilapia, coffee, spices, cocoa, bananas, berries, and canola oil.
Many business owners hope Trump’s original plans—for Chinese tariffs up to 145%, for example—never come to pass.
“That would have bankrupted people quickly, honestly,” said Danny Reynolds, who runs clothing boutique Stephenson’s in Elkhart, Indiana. “So I feel like it was always just kind of a threat thrown out by the president to start negotiations.”
He hopes tariffs stay as they are now, around 30% on Chinese goods, with costs shared among makers, wholesalers, retailers, and consumers.
“If you take 30% and divide it by five or six,” said Reynolds, “suddenly it’s not so dramatic.”
Source: npr.org by Alina Selyukh