Washington's tariffs take toll on consumers

US companies such as Walmart, Nike, Ford, Macy's, Black & Decker, Procter & Gamble, and Adidas, as well as fast fashion stores Shein and Temu have announced price increases due to tariffs, forcing US consumers to pay more for goods.

The companies said that the US' imposition of tariffs had raised their operating costs, forcing them to find ways to offset the levies, such as raising prices.

Macy's slashed its 2025 profit outlook this year. CEO Tony Spring told investors on a first-quarter earnings call that it would raise prices because of tariffs. The retailer plans to close 150 underperforming stores nationwide by 2027.

The July Consumer Price Index released on Tuesday by the Bureau of Labor Statistics showed that prices rose by a mild 2.7 percent on a 12-month basis.

The key measure of underlying inflation rose in July as businesses navigated the levies. Although overall the increase was not as much as expected, economists said the impact is substantial.

"A substantial portion, but not all, of the higher costs will be paid by US consumers," Tom Fullerton, an economist and professor at the University of Texas at El Paso, told China Daily. "Chinese companies and US importers will also see reduced profit margins, because not all of the tariffs will be completely passed on in the form of higher prices."

Analysts also warned that the full impact of tariff increases on consumer prices is yet to unfold.

Consumers absorbed 22 percent of tariff costs through June, Goldman Sachs economists said, while businesses bore nearly two-thirds of the tariffs. By October, the amount absorbed by consumers is expected to rise to 67 percent, the bank said.

The latest data shows that core CPI rose 0.3 percent month-on-month, or 3.1 percent year-on-year. This is the highest level in six months. The costs of household goods, furniture and appliances, apparel and footwear were most affected by the tariffs.

On Aug 7, the US administration rolled out its global tariffs on trade partners with rates ranging from 10 to 50 percent.

The levies are on food, cars, clothes, electronics and more — much of which is imported, and this could mean that the average family will pay an extra $2,400 per year, the Budget Lab at Yale estimated.

At least 90 percent of US citizens admitted to feeling "stressed" about the rising cost of groceries, an Associated Press-NORC Center for Public Affairs Research poll found. Groceries got more expensive in every category from June 2024 to June 2025, BLS data shows.

Pricier coffee

Even caffeine lovers have been forced to wake up and smell the coffee after prices rose 2.2 percent month-over-month, CPI data showed. The US administration has placed a 50 percent tariff on imports from Brazil, a major source of coffee imports for the US.

David A. Gantz, an economist at the Baker Institute at Rice University, told China Daily: "The tariffs will… be passed on to the consumers purchasing coffee in the supermarket and coffee shops."

The impact of tariffs has also spread to retailers and automakers.

Ford, for example, is set to make pricing adjustments in the near future, according to Bloomberg.

So too is German carmaker Volkswagen, which reported a $1.5 billion loss in the first half of the year, after the tariffs were launched, ABC News reported. Sales in North America plunged 16 percent due to tariffs.

Some shoppers at Walmart have reported on social media seeing price tags ripped off most garments as the retail giant quietly adjusted its prices, though it displays them more readily on its app. Walmart CEO Doug McMillon said in May that the company could not "absorb all the pressure given the reality of narrow retail margins".

At least 75 percent of all toys, or $13.4 billion worth, were imported from China in 2024, according to the US Commerce Department. Toymakers Hasbro and Mattel warned that higher prices were on the way due to rising tariff costs.

Nike said in a June earnings call that it would need to raise prices to offset a possible $1 billion in extra tariff costs in the 2026 fiscal year. Black & Decker, and Procter & Gamble are also raising prices. Retailer Target said in March that it would raise prices on groceries due to tariffs on Mexico and Canada, which ship in a lot of food items.

belindarobinson@chinadailyusa.com