Retailers Face ‘Perfect Storm’ as Tariffs Threaten Price Hikes

American retailers have reportedly issued a dire warning on the White House’s latest tariffs.

Retailers say the ongoing trade war could bring about product shortages, higher prices and job cuts, CNBC reported Friday (Aug. 1).

“Continued high tariffs from key sourcing countries, last-minute policy shifts, and unclear new requirements are creating the perfect storm for a difficult holiday season and a challenging spring,” said Steve Lamar, CEO of the American Apparel & Footwear Association.

“America’s most popular brands and retailers are in a flurry of navigating the still-unpublished details of new trade deals. As they plan for spring 2026, they’re weighing tough choices: whether to raise prices, cut jobs or reduce the range of products offered to consumers.”

He added that the American fashion industry already carries “outsized share of the burden,” accounting for less than 5% of imports last year but 25% of all tariffs collected by the U.S.

The report notes that this is the time of year in which companies plan and place orders for the new year and the spring. However, there’s now a wide-ranging reluctance to make decisions about sourcing and shipping.

“To stay competitive, American companies need clear, final trade terms now; not uncertainty layered on top of already unsustainable costs,” Lamar said.

The report also cites a statement from David French, the National Retail Federation’s executive vice president of government relations, who said that “binding trade agreements that truly open markets by lowering tariffs, not raising them,” should be the Trump administration’s goal.

In an interview last week with the Wall Street Journal, Andrew Wilson, deputy secretary-general of the International Chamber of Commerce, said a lack of clarity around tariffs has caused businesses around the world to pause investment and hiring as they await more information.

“Last night’s announcement provides confirmation that the administration is set on applying generally higher tariff rates,” Wilson said. “But at a more practical level, we still see companies struggling to understand how the country-specific rates will apply in practice.”

Meanwhile, research by PYMNTS Intelligence shows that executives can see a “clearer, if potentially harsher” way forward amid the tariffs, with perceived uncertainty falling to its lowest point in almost a year.

“Executives, it seems, are treating the current environment like spinach. It’s not what they want, but they’re eating it, because they finally know what’s on the plate,” PYMNTS wrote.

“And what’s on the plate is more heapings of uncertainty requiring operational agility across key areas like supply chain management, procurement and product.”