ail experts Melissa Minkow and Neil Saunders said retailers and consumers will feel financially strained if Trump’s tariff proposals take effect. “Tariffs will push up costs for American companies and those costs will eventually find their way through to higher prices for shoppers,” Neil Saunders, GlobalData managing director, told Inside Retail. Saunders observed the retail categories that will be hit hardest if these tariffs take effect are appliances, furnishings and apparel. As an example, the National Retail Federation estimated that a $40 toaster would increase in price to $48 to $52, while a pair of sneakers could jump from $59 to $64.   “Over time, retailers and manufacturers might shift where they make things, but making these changes can’t be implemented overnight. If tariffs are globally applied, then there will be no avoiding them,” Saunders warned. The managing director pointed out that Trump may be using the threat of tariffs as a negotiating tactic.  “So, there is no guarantee that long-term tariff policy will be as harsh as the rhetoric,” Saunders noted. “Even so, retailers have been preparing for the worst by looking at alternative sourcing arrangements, mapping the cost implications, and working with suppliers on mitigation strategies.” Melissa Minkow, a director of retail strategy at CI&T, forecasted that retailers will be left with three options if the tariffs take effect. They will either raise prices to support the increased costs, find new suppliers in countries where tariffs are not levied, or do a combination of the two strategies. For retail executives who have praised the tariffs as a way of bringing more production and sourcing back to the US, Minkow cautioned that the changes could negatively impact US manufacturers, as they often use foreign machinery to produce.  “So, at every angle, these tariffs will be extremely costly and time-consuming for retailers with any non-US component of their model,” Minkow stated.  She also predicted that stockouts will be much more likely to occur due to slower production capabilities, and inflation may jump up since materials and products will have to carry the import costs. How retailers have been responding Major corporations like Best Buy and Ikea have already begun cautioning consumers that the tariffs are likely to increase production and inventory costs, which will be reflected in the price of products.  “Tariffs make it more difficult for us to maintain the low prices and be affordable for many people, which in the end is our goal,” Jesper Brodin, the chief executive officer of Ingka Group, which owns and operates furniture retail giant Ikea, told CNN. “We have never experienced a period of benefit when we had high tariffs. But it’s beyond our control. We will need to understand and adapt.” Meanwhile, Jolie, a lifestyle brand known for its filtered showerheads, has been encouraging customers to get ahead of the tariffs by shopping now. Last week, it sent an email with that message, and it is on track to be one of the brand’s top five best-performing marketing emails this year based on revenue, according to Ryan Babenzien, co-founder and CEO of Jolie. Many companies have already begun shifting their manufacturing from China to areas such as Southeast Asia to avoid tariffs placed on the aforementioned countries.  A 2024 survey conducted by management consulting firm Bain & Company revealed that 69 per cent of chief executives and chief operating officers plan to reduce their company’s dependence on China, a sizeable increase from the 55 per cent that planned to do so in 2022.  The last, and arguably most expensive, step that some retailers are taking is ordering a high amount of stock in advance.  Leah Dark-Fleury, the co-founder of Stone Fleury, a natural stone and porcelain wholesaler based in San Francisco, plans to order two shipping containers worth of natural stone from her supplier in China. The extra inventory would cost up to $100,000 and last between a few months to a year, depending on customer demand.  Similarly, Jason Junod, the founder of Wisconsin-based skincare brand Bare Botanics, plans to order a year’s worth of inventory, approximately $50,000 worth, from his suppliers in China. For now, “retailers are holding their breath to see what happens, but they’re ready to act,” Saunders concluded.