Will Tariffs Affect Back-to-School Shopping Season?
5/12 UPDATE: U.S. and China agree to to slash tariffs for 90 days; the U.S. will temporarily lower its overall tariffs on Chinese goods from 145% to 30%, while China will cut its levies on American imports from 125% to 10%.
Back-to-school shopping is just around the corner. Last year, more than half (55%) of back-to-school and college shoppers began buying items for the upcoming school year as early as July, according to the National Retail Federation and Prosper Insights & Analytics.
Retailers themselves are currently in the middle of ramping up inventory to fill orders for the critical back-to-school shopping season. However, President Trump’s trade war may cause both retailers and consumers to run into roadblocks in obtaining this year’s school essentials.
[RELATED: Back to School, Back to Health: Rethinking Family Nutrition This Fall]
CNN reports that the first boats carrying Chinese goods with 145% tariffs are now just arriving at U.S. harbors. This means that consumers will face higher prices and shortages of certain items.
Last month, big back-to-school retailers like Walmart Inc. and Target Corp. warned Trump of this very situation. The two retail giants advised the president that his sweeping tariff policy could disrupt supply chains and lead to empty shelves and higher prices in the coming weeks, when shoppers will be scouring stores for school essential like bookbags, notebooks and pencil holders.
As reported by CNN, shipments from many importers have already canceled previous orders because U.S. businesses aren’t interested in paying the steep tariff, which can more than double the price of Chinese goods.
Tariffs are also driving cost increases and creating operational challenges across the wholesale distribution industry. The National Association of Wholesaler-Distributors (NAW), in collaboration with Modern Distribution Management (MDM) Research, released new survey results on the impact of tariffs on the supply chain.
"The survey indicates that one-third of distributors are already facing price hikes of 25% or more. Though these increases haven’t hit store shelves yet, it’s an indication of where prices are headed," said Eric Hoplin, CEO of Washington D.C.-based NAW. "We urge President Trump to secure trade agreements quickly to restore certainty, help businesses plan, and ease supply chain pressures."
Survey results highlight that nearly two-thirds (62%) of distributors expect their cost of goods sold to rise by 10% or more in 2025. Financial strain is already widespread, with 67% of respondents reporting a negative impact on their businesses, and only 2.5% indicating any positive financial impact.
What about grocery shopping for back-to-school lunches and snacks? According to the latest annual survey by FMI – The Food Industry Association, conducted by The Hartman Group, most Americans (70%) say they are extremely or very worried about rising grocery prices, and 78% said they are at least somewhat concerned about the impact of tariffs on the cost of imported food and ingredients.
How can grocery retailers ease consumer uncertainty as back-to-school season approaches? As Progressive Grocer Editorial Director and Associate Publisher Gina Acosta detailed in her latest Editor’s Note, it might be time for a merchandising reset. Acosta recommends that retailers double down on products made locally, regionally or in the United States. During these times of predicted supply shortages and price hikes, more back-to-school shoppers may be looking for 'Made in the USA' products than ever before," Acosta wrote.
