U.S. retailers are developing contingency plans to deal with the prospect of tariffs proposed by President-elect Donald Trump as he returns to the White House.

While he was a candidate, Trump proposed levies of 60% on products imported from China and 20% on all products imported into the United States. It could also impose tariffs of 100 percent on countries that don’t use the U.S. dollar and 2,000 percent on cars built in Mexico.

“Tariffs are the greatest thing ever invented,” Trump said in September in Flint, Michigan.

Tariffs, which operate as a sales tax on products made outside the borders of countries that import those products, could impact most U.S. industries.

Under Trump’s plan, Americans could lose between $46 billion and $78 billion in purchasing power a year on products such as clothing, toys, furniture, appliances and travel items, the Commission said. National Retail Federation. A $50 pair of sneakers could cost between $59 and $64 under the tax.

Trump said China would pay the tariffs, not American businesses or consumers.

But companies facing these taxes are busy deciding whether to source products from outside China or raise prices. One company says it will do the latter.

“If we get tariffs, we will pass them on to the consumer,” Philip Daniele, CEO of AutoZone, an auto parts chain, said during an earnings conference call in September.

“We usually raise prices before we know what the rates are going to be; we usually raise prices before that,” Daniele said.

Tiffany Smith, vice president of global trade policy at the National Foreign Trade Council (NFTC) in Washington DC, told China Daily: “The new and expanded tariffs will hurt working families. »

The new taxes could also mean “that a household with a median income would have to pay $1,700 more each year in import taxes,” Mary Lovely, professor emeritus of economics at the Maxwell School of Citizenship and Public Affairs in Syracuse University and Peterson Principal Investigator. Institute for International Economics in Washington, told China Daily.

Trump has said his policies would bring manufacturing back to the United States, creating more jobs, but not all companies say they can afford American facilities.

It’s “unlikely that we’ll go back to the United States much because it’s just not profitable,” Donald Allan Jr., chairman and CEO of Stanley Black & Decker, said during a recent conference call on results.

In the spring, the $16 billion tool maker developed a plan to deal with any levies, admitting that any “price increases associated with tariffs (would) be passed on to the market.” .

Helen of Troy, parent company of Osprey and Hydro Flask, will seek new markets outside of China to avoid tariffs.

Zichun Huang, a China economist at Capital Economics, a London-based research firm, wrote in a recent note that “Trump’s return could create a short-term boost for Chinese exports as U.S. importers increase their purchases to get ahead of customs duties”.

China-based e-commerce companies and others accounted for 20% of net new U.S. warehouse leasing in 2024, according to Prologis, the world’s largest industrial real estate operator.

During Trump’s first term, tariffs on more than $300 billion of Chinese-made goods sparked a trade war and the United States was hit with retaliatory tariffs.

President Joe Biden maintained those initial tariffs and increased levies on $18 billion in Chinese imports in September.

Steve Lamar, CEO of the American Apparel & Footwear Association, said in a statement: “Tariff policy under the new administration will indeed be challenging and will trigger new inflationary cycles if the campaign proposals are fully implemented, which which will make it more expensive for Americans to get dressed every day. »

Trump advisers recently met with Republican Jason Smith of Missouri, chairman of the House Ways and Means Committee, to discuss how a tax package could be partially financed by tariffs, according to Politico.

In the early days of the United States, tariffs were widely used to raise government revenue. However, since the 1950s, tariffs have accounted for 2 percent of total federal revenue, according to the Congressional Revenue Service.

“As trade barriers, (tariffs) can also make domestic industries less competitive and cause other countries to retaliate,” said Thomas Fullerton, an American economist and professor of economics at the University of Texas at El Paso, to China Daily. “When this happened in the 1930s, the Great Recession deepened and prolonged.”

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