Retailers are bracing for impact as Trump’s latest tariffs on imports from Canada, Mexico and China send shockwaves through supply chains and consumer pricing. But experts warn the ripple effects extend far beyond the checkout aisle.
Experts explain how Trump's tariffs disrupt supply chains, raise costs and reshape consumer spending.
Retailers are scrambling as Trump’s latest tariffs take effect, driving up costs and forcing companies to rethink their strategies overnight. The new trade measures include a 25% tax on imports from Canada and Mexico and a 20% levy on goods from China, triggering price hikes and logistical headaches across industries.
For retailers such as Target, the challenge is clear: rising import costs mean higher prices for consumers – particularly on essentials, including fresh produce. But beyond immediate sticker shock, these policies are disrupting long-term business strategies, pushing brands to restructure supply chains, rework pricing models and adapt to an increasingly volatile market.
With tariffs shaking up cost structures, businesses are making rapid adjustments to minimize exposure. Lindsay Nahmiache, CEO of Veriphy, a skincare brand operating in both the US and Canada, says the trade policies have forced her to rethink distribution entirely.
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“We have a manufacturing distribution facility in Canada and a distribution facility in the US, so we ended up transporting more inventory into the US,” Nahmiache explains. “Whereas we used to run it like a North America-wide company, shipping from the same area, we’ve split into two companies in essence, shipping from different areas.”
For a retail giant such as Target, which sources a significant portion of its inventory internationally, the stakes are even higher. While big-box retailers have the advantage of robust supply chain investments, that edge may be temporary.
“The private-label advantage for retailers like Target may be short-lived as Shein is reportedly scouting for Texas warehouse sites,” says Jeanel Alvarado, founder and CEO of independent news outlet Retailboss. “The tariff wars may ultimately accelerate, not prevent, the globalization of supply chains.”
Many brands are racing to relocate production, following in the footsteps of companies such as Steve Madden and Elf Beauty, which have pivoted to suppliers in regions with fewer trade barriers. Meanwhile, Canadian businesses such as Sophie Grace are finding creative workarounds – warehousing goods south of the border to avoid steep retail-level duties.
The most immediate impact of these tariffs is higher prices at checkout. From fresh produce to electronics, experts warn that costs are already creeping up.
“The Trump administration’s new tariffs, including a 25% tax on imports from Canada and Mexico and a 20% levy on goods from China, are reshaping the way businesses operate and Americans shop,” says George Carrillo, CEO of the non-profit Hispanic Construction Council. “These policies impact a vast range of goods—fresh produce, electronics, and vehicles – that are essential for many of us.”
Carrillo notes that grocery prices alone are expected to rise by 3%, while the effects extend beyond retail: steel prices have jumped 30%, and heavy machinery costs are up by 10%, putting pressure on industries such as construction.
To soften the blow, Target and other retailers are rolling out discounts, loyalty perks and promotional pricing. But ultimately, businesses are left with a tough choice –absorb the costs or pass them on to consumers.
“Retailers will need to make calculated decisions that balance conversion, revenue, margins and competitive positioning,” says John Bruno, vice-president of commerce strategy at AI-powered commerce platform Pros. “Since simply passing the cost to the customer could lead shoppers to another retailer, businesses will likely eat part of the tariff and pass along part to the customer. It’s a lose-lose situation – margins suffer and customers pay more at checkout.”
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Beyond immediate disruptions, these tariffs could permanently alter retail supply chains. Bruno warns that procurement and sourcing teams will have to move quickly –but shifting suppliers isn’t as simple as flipping a switch.
“Retail sourcing is a complicated game where businesses tend to establish fairly robust procurement contracts,” Bruno explains. “Procurement and sourcing professionals will be working double time to identify alternatives, but some businesses may be beholden to existing contracts and will need to spend time both negotiating new contracts and onboarding new suppliers.”
And while retailers will feel the margin squeeze almost immediately, consumers won’t see stable price changes for weeks or even months. “The impact on margins will happen almost instantaneously after tariffs go into effect. Importers will be hit with those taxes at ports of entry, and they will start passing those costs down to retailers,” Bruno says. “Stable pricing changes for consumers will lag behind the margin effect on retailers.”
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Looking ahead, retailers must get comfortable making decisions at breakneck speed. “For many businesses, they plan six months to a year ahead. That playbook needs to be thrown away,” Bruno asserts. “Quickly, those decisions will need to increase in velocity – from a year to six months to a quarter, a month and even a week.”
As companies scramble to adapt, consumers should brace for turbulence. Whether Target and other major retailers can navigate these challenges without losing price-sensitive shoppers remains the real question.