Vivian Hoffman has worked in retail for a half-century, including 25 years as a buyer for Century 21 and the last eight running Whim, a chain selling affordable women’s clothing in the suburbs of New York City. She has adapted to recessions, the turmoil after the attacks on Sept. 11, 2001, and the Covid-19 pandemic.
But the last few weeks have presented a set of challenges that are confounding even for an industry veteran.
The bulk of the clothing and accessories that Ms. Hoffman sells are produced in China, facing import duties of 145 percent for now, and Vietnam, which could face high tariffs in a few months. While her vendors pay the tariffs, one of them recently raised shoe prices 20 percent while others say they will soon increase theirs to offset higher costs. A vendor that sells Chinese-made jeans could not even figure out what prices to put on items in its fall line.
The upheaval on top of wavering consumer demand has left Ms. Hoffman in a bind.
“I was going back and forth: Do I buy less because I think business is going to be hurt or do I try to buy extra merchandise because I’m afraid of an increase in prices?” she said. “I’ve been going back and forth between two extremes.”
With five stores and a small online presence, Whim is just a speck in the vast retail universe. But the thorny decisions that Ms. Hoffman faces are a microcosm of the whiplash that retailers across the United States are confronting. All businesses crave clarity, yet the wide-ranging tariffs imposed, threatened and pulled back by the White House are making it difficult for companies of all sizes and shapes to plan ahead.
Big-box retailers like Walmart and Target and giant e-commerce operators like Amazon have the power to demand concessions from their suppliers overseas. Andy Jassy, Amazon’s chief executive, said in an interview on CNBC on Thursday that the company had accelerated bringing some inventory to the United States ahead of the tariffs and would try to “renegotiate terms” with some suppliers.
Most retailers, though, are small, independent businesses that are often at the mercy of their vendors. And in many industries, like apparel, most of what they sell is produced in China and other countries, with few options they can afford made in the United States.
Alyssa Chambers, who owns Nova Essence IO, which makes scented candles, said the price of a 12-pack of Chinese-made glass candle jars had jumped to $25, from $21 last year. But similar jars produced in America cost at least twice as much, she said. Even before this week’s events, the costs of wax and wicks, which she also orders from China, have risen as well.
“Right now, I’m eating the extra cost for the supplies because I just don’t want the customers to be affected,” said Ms. Chambers, who works on her own and sells her goods online and at pop-up shops, shows and events. “I’m just taking the time to sacrifice and not respond emotionally.”
The start-and-stop nature of the rollout of tariffs has also roiled the stock market and dampened consumer confidence as people have hunkered down. Retail sales grew 0.2 percent in February compared to January, though spending on clothing and accessories, on electronics and at restaurants and bars fell.
The University of Michigan Consumer Sentiment Index fell 11 percent in March, the third straight monthly decline, to its lowest level since November 2022. Anxiety about rising prices could persuade consumers to buy more secondhand apparel and other items on the secondary market, according to ReturnPro, which recently surveyed consumers about products they had returned. Nearly 85 percent said they were concerned that tariffs would raise prices.
“Consternation over the tariffs and its impact on consumer sentiment on retail sales could end up being worse than the impact of inflation,” said David Silverman, senior director of the corporates group at Fitch Ratings, which this week lowered its rating for the U.S. retail and consumer product sector to “deteriorating” from “neutral.”
The latest increases in tariffs on China are likely to disproportionately hurt consumer goods, according to Anna Wong, an economist at Bloomberg.
Last year, three-quarters of all toys and sporting goods, 40 percent of all footwear and 25 percent of all textiles and clothing imported into the United States came from China, according to the Peterson Institute for International Economics.
For months, many companies have tried to adjust their business plans in anticipation of tariffs, with varying success. The shoemaker Steve Madden said in February that it had reduced the percentage of goods it imported from China to 58 from 71 since November. The company wants to reduce that number to the low 40s range in the coming months.
“We will selectively raise prices,” Edward Rosenfeld, the company’s chief executive, told investors in February. “Where we think that we can get a little bit more for the goods, we will do that starting in the fall.”
At an investor conference this week, Walmart, the country’s largest retailer, stood by its forecast for a 3 to 4 percent increase in sales in its first quarter. But because one-third of what Walmart sells comes from all over the world, especially China and Mexico, tariffs have made it harder to predict operating income growth.
“We’re one week into this new tariff environment, and we’re still working through what this means for us,” John David Rainey, Walmart’s chief financial officer, said. “For the current quarter, the uncertainty and decline in consumer sentiment has led to a little more sales volatility week to week and, frankly, day to day.”
In the days after the tariffs were first announced, Amazon canceled orders for some items, including skateboards, that it bought from suppliers through a special program, according to one vendor whose orders were canceled, two consultants to suppliers and LinkedIn posts from others saying their orders were canceled.
Under the special program, vendors sold their products to Amazon at a lower price, but Amazon paid to move the products to the United States and was on the hook to cover the tariff costs directly. When that tariff risk changed, Amazon effectively pushed more of the costs back onto its suppliers by canceling the orders. Now, the suppliers must import the products themselves, pay the tariffs and then try to renegotiate a higher wholesale price with Amazon.
Amazon declined to comment on the canceled orders, which were reported earlier by Bloomberg.
Hobby Lobby, the crafting retailer, told vendors that because of the escalating trade war and the “rapidly shifting and unpredictable landscape,” it was delaying shipments from China, though not canceling orders, according to correspondence dated Thursday and viewed by The New York Times. It said it would review its plans weekly. Hobby Lobby did not have an immediate comment.
Smaller retailers, no matter how well prepared, don’t have Amazon’s muscle or flexibility. Kim Vaccarella, the founder of Bogg, which sells handbags and accessories, anticipated tariffs on China, where all of her suppliers are. So in January, she visited Sri Lanka and Vietnam to find suppliers to help insulate her company.
She and her team received samples from a manufacturer in Vietnam and was ready to place an order. But after the White House imposed tariffs of more than 40 percent on imports from Vietnam, Ms. Vaccarella delayed the order until she could gauge the impact.
“We felt like we were in a good place” before the White House announced tariffs on dozens of countries last week, she said. “It was like, oh, my God, we did all this work and spent all this money going out there for nothing.”
The tariffs on Vietnam have been paused for three months, but the confusion remains. Ms. Vaccarella said her company had recently raised prices by $5 on some products, but retracted the increase out of deference to its customers. For now, it is bracing to see what happens before taking such a step again.
“Every day, you can ask me the same question and it’s a different answer,” she said, “which is the craziness and the uncertainty.”
