• Trump’s second term likely means changes are afoot that will impact retailers.
• Experts say the tariffs are a priority for many businesses and would represent new costs for consumers.
• At the same time, tax cuts could boost spending and regulators could take a softer stance on mergers.

The return of Donald Trump in the White House is likely to usher in sweeping changes that will impact retailers like Walmart, Target and Costco – ranging from new tariffs to tax cuts and a new regulatory environment.

Trump’s campaign promises, along with his record in his previous term, offer a glimpse of what major retailers can expect from his second term.

As Nov. 5 approaches, companies including TractorTractor Supply Co., Best Buy and Dick’s Sporting Goods said in their earnings calls that the election helped make the U.S. consumer generally more cautious.

However, the unambiguous election outcome should reassure retailers as they approach the critical holiday shopping period.

“Elections are very distracting for the consumer,” Neil Saunders, a retail analyst at Global Data, told Business Insider. “It’s not a big deal, but it just doesn’t contribute to consumer trust and attention.”

“Retail really wants a clear victory, whatever it takes,” he added. “They will then be able to understand the policies and how to respond, and then the consumer can start to focus on the holidays and open their wallets.”

Walmart, which operates thousands of stores in both red and blue states, was measured in its outlook during an August earnings call.

“The great thing about elections is they happen every four years and we can have a long history of seeing their impact,” said Walmart Chief Financial Officer John David Rainey.

As Election Day approaches, here are four key areas retailers will be watching closely during this transition period.

Pricing is the biggest question

The current priority for many companies is the question of pricessay the experts.

If Trump follows through on his campaign proposals for 10-20% tariffs on most imports and 60-100% tariffs on products from China, it would mean a significant change in the way retailers do business.

“It would represent a massive upheaval to most of these companies’ cost structures,” said Chris Walton, a former Target executive and founder of Omni Talk.

Given the expense of revamping supply chains, large retailers are still in the research phase rather than committing to a new strategy, Walton said.

Even if retailers can absorb some of the costs associated with tariffs, U.S. households would likely lose as much as $78 billion in purchasing power per year, according to analysis of the National Retail Federation, a lobbying group representing the industry.

“A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter,” said Jonathan Gold, NRF vice president of supply chain and customs policy. “This tax ultimately comes out of consumers’ pockets via higher prices.”

Still, Tinglong Dai, a business professor at Johns Hopkins University, said the retail sector had handled previous rounds of tariffs without much disruption to prices or the flow of essential goods.

“Retailers have become incredibly adept at absorbing this friction,” he said.

“You can say it’s a negotiating strategy and it won’t happen, or you can say it will happen, maybe in a diluted form and not so bad, but that causes a lot of nervousness,” Saunders said of Trump’s decision. proposals.

Taxes are important, but take the time to see the results

Trump is expected to extend his 2017 tax cuts, which are set to expire next year. He is also likely to cut corporate taxes even further, with the support of his supporters in the House and Senate.

Saunders said the tax cuts would lead to more disposable income for consumers, which could increase spending.

“The whole retail industry is very dependent on the middle class and what you can get out of their spending levels,” he said.

Any changes to the tax code will likely be less disruptive than the tariffs because they will take several months to ripple through the economy.

Additionally, retailers regularly navigate tax changes at all levels of government, from local to national, Walton said.

“What’s different,” he added, “is that it’s of a size and scale that the retail industry hasn’t seen in 100 years.”

Immigration presents a mix of challenges

Pass studies of the Pew Research Center suggest that relatively few of the 15 million retail workers live in the United States illegally, so a crackdown on illegal immigration would likely not complicate retailers’ hiring efforts .

Still, a widespread eviction effort could negatively impact people across the company, as well as customers and communities.

“Everyone is going to feel the weight of this,” Walton said. “If that were to happen, it would be a difficult thing to prepare for, because the collateral damage could be quite costly.”

A more pressing concern, Saunders says, is strengthening legal immigration, including the H1-B visa program for skilled workers, including the tech talent that giants like Amazon increasingly rely on, Walmart and Target.

“It’s actually very unhelpful for a lot of retailers, especially in areas like technology, where a lot of retailers are involved in,” he said.

Other experts told BI that concern for national security and worker availability is much different than eight years ago, which could persuade Trump to soften his stance.

Regulations falling, agreements increasing

Federal Commerce Commissioner Lina Khan, who has launched investigations into corporate price gouging, will likely be one of the first to visit under a new Trump administration, Saunders said.

In place of its aggressive antitrust stance, a more transaction-friendly FTC is likely to emerge, he added.

Mergers like the proposed one between Kroger and Albertsons could find a more receptive audience in Washington, and other consolidations could soon follow.

Although a Republican administration is generally seen as more business-friendly, Walton said that might not always be as simple under Trump.

“It may vary depending on the taste of the month, in terms of what areas his administration wants to focus on or who he wants to benefit from,” he said.