Americans for Free Trade, an industry coalition knows this all to well. In a letter the group sent to President Donald Trump in August declared - “With some products facing tariffs as high as 30%, many businesses will have no choice but to pass along those costs to consumers.” The letter went on to cite holiday shoppers as the ones who will get hit hardest by the tariff increase.
Despite the trade war - holiday sales are expected to grow from last year despite the looming trade war. The National Retail Federation (NRF) recently forecasted sales to increase up to 4.2% this year. Like last year online businesses are expected to outpace brick and mortar stores as more consumers opt to purchase their gifts from the comfort of their homes.
It’s unclear if it will affect this holiday season as many companies are opting to purchase goods ahead of the October 15th trade increase. Even so – many consumers could get spooked and decrease the amount of goods they purchase. NRF CEO, Matthew Shay reiterates the hesitation that the trade wars could produce for businesses and customers alike. “The uncertainty around those issues have really been in many ways the overall arching theme of the economy this year while we continue to see tremendous growth,” he told reporters. “The biggest news in the uncertainty is related to trade issues.”
Many companies have already begun hiring for the holiday season including UPS. Despite the tariff wars- Jim Barber, COO for UPS expects a robust holiday season shipping more than 30 million packages per day. "We expect another record Peak season this year, with daily package deliveries nearly doubling compared to our average of 20 million per day," Barber said in an announcement. Other companies such as Walmart and Amazon are also expected to do well this season. A survey conducted by Coresight Research showed that approximately 75% of people plan on doing a majority of their shopping at either Amazon or Walmart leaving just 25% for brick and mortar stores and other e-commerce companies.
It’s tough to say if the tariff war between the US and China will affect this holiday season. If businesses have already bought products for the holiday season there is no reason why they would need to raise the prices of their goods. If they’ve waited too long to purchase items – customers may find that they are paying more money than their friends who purchased holiday gifts ahead of time.
