December 17, 2025
mandritoiu/Depositphotos.com
Will Tariffs Still Cause Major Headaches for Retailers in 2026?
The National Retail Federation issued a recent forecast predicting import volumes will continue to decline well into 2026, largely due to uncertainty over tariffs and trade policies.
“Stores are stocked up and ready for a record holiday season but there is still a great deal of uncertainty about what will happen in 2026 with trade policy,” said Jonathan Gold, NRF’s VP of supply chain and customs policy.
The group moderated its forecast for the declines in the fourth quarter of 2025, pointing to the Trump administration’s move to reduce tariffs on some food products and an agreement with China.
However, the NRF doesn’t see the tariff effects ending soon. Even if the Supreme Court rules that the levies are illegal under the International Emergency Economic Powers Act, NRF suspects the Trump administration will reinstate existing tariffs under other trade authorities.
“We are seeing the results of the tariffs in weakening cargo demand going forward from the fourth quarter of this year and likely into the first half of next year,” Hackett Associates founder Ben Hackett said. “Container shipping rates are already declining on both coasts due to less need for cargo space for goods from both Asia and Europe.”
A third-quarter CFO survey — from Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta — found that, on average, price growth would be about 30% lower in 2025, and roughly 25% lower in 2026, without the addition of tariffs. Although optimism about the U.S. economy improved in the survey, tariffs and trade policy remained the top concerns among survey respondents.
Some Retailers Believe Trump Administration May Back Off on Tariffs in 2026
Many retailers and vendors have shifted sourcing and taken other mitigation steps to better react to any future tariff changes.
However, some expect the Trump administration may back off from some tariffs given concerns over “affordability.” A Politico poll, conducted in mid-November, found 55% of U.S. adults — including 22% of Trump voters — blamed the Trump administration for grocery prices being “difficult” or “very difficult” to afford.
Some also feel prices may rise higher next year as holiday promotions end, and retailers run low on inventory secured at pre-tariff prices.
A note last week from Jeffries cited Target, Best Buy, Hershey, JM Smucker, Ralph Lauren, and Coach-owner Tapestry among stocks expected to “win from tariff relief” as the White House potentially reduces tariff rates ahead of the midterm elections next fall. The analysts said affordability concerns offer “an opportunity to recalibrate tariff levels in select categories.”
BrainTrust
Karen Wong
Co-Founder & CEO, TakuLabs Ltd.
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Gary Sankary
Retail Industry Strategy, Esri
Recent Discussions
Discussion Questions
Have retailers and vendors become accustomed to tariffs or will they be just as disruptive in 2026?
How confident are you that retailers will see some notable tariff relief in the months ahead?
Poll
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The current president loves tariffs but doesn’t understand them. The White House will continue to change tariffs and re-impose them all next year, to the consternation of retailers and the annoyance of customers. Things will likely get worse before they improve.
“The current president loves tariffs but doesn’t understand them.” That is an understatement.
Headaches in 2026 will get worse as the reality of tariff increased prices hit home even more dramatically for customers. So while 2025 was filled with anticipating fear and first encounters, 2026 is when reality hits retailers fully. It will be a difficult year.
Tariffs have not gone away. And, if anything, they become more of an issue: 2025 was a year of partial tariffs, whereas the full force will be felt in 2026. That said, I don’t expect retailers to pass the pain across in full – but that means many will take a hit on margins or will have to make cuts elsewhere. Costs have gone up and rebalancing retail models will cause pain in some form or another.
So which is it, relief or even more convoluted than it is already? Whichever it will remain chaotic, IMHO only a fool would claim otherwise.
Retailers have started to and continue to endeavor to attenuate the impact of tariffs by employing a variety of tactics. However, many if not most of the tariffs continue to impact costs. Retailers can’t just “eat the difference.” That is not good business. Changing the playing field is going to take time. more than a few months. It’s like bringing a supertanker to a full stop (20 miles). So the conclusion is that tariffs are going to impact retail pricing and for at least a year, and maybe longer. The only thing that will bring prices down sooner rather than later;ater, is to drop the tariffs.
that “supertanker” is fueled by emotions and may not stay on any course.
–Dropping the tariffs is an importer’s legal issue.
–What retailers/commerce would do is secondary game. Some may want to recoup their margin (keep prices higher). Same as the endless pandemic recovery… the abuse of the ‘supply chain’ excuse.
The tariffs haven’t fully worked their way through the economy yet as:
a) many businesses overstocked pre-tariffs in Q1
b) with tariff policy constantly changing, many retailers chose to eat the costs to avoid losing market share until there is greater certainty
c) likewise, some suppliers chose to subsidize some of the tariff impact
But in 2026, the pressure on margins will likely force those businesses holding back to start passing on the cost of tariffs. Supply chains often take years, if not decades, to build. So the disappearance of lower-margin players won’t be easily replaced and we will all need to accept that there will be less choice in the market. Even if I want to buy from brands I like in the US, I can’t anymore as many have simply stopped shipping to Canada, and vice versa.
Tariffs have certainly ceased to feel “new” to many retailers and vendors — the playbooks are more developed, and supply chain teams are more adept at hedging, sourcing alternatives, and absorbing cost pressures. But familiarity isn’t the same as immunity. Even seasoned operators feel the drag of persistent tariff uncertainty because these are real cost inputs that ultimately shape pricing, margin, and sourcing decisions. In that sense, I don’t think tariffs will be less disruptive in 2026; they’ll just be better managed until a definitive policy resolution emerges.
That said, resilience has been a defining theme across retail and consumer brands, and the American consumer has remained surprisingly robust in the face of inflation and higher interest rates. But resilience isn’t limitless. As we look toward 2026, potential headwinds in employment and economic growth could expose the fragility beneath the surface — especially if tariff costs get passed through at a time when household budgets are already stretched. The broader macro backdrop matters as much as the policy itself.
The key catalyst now — and the thing most retailers are watching closely — is the pending Supreme Court decision. Relief or confirmation of tariff authority could materially change planning assumptions for sourcing, pricing, and inventory strategies. Until that ruling lands, confidence in notable tariff relief has to be tempered with caution. Retailers will continue to build operational defenses, but lasting stability depends on clarity from the policy front. In the absence of that, we shouldn’t expect tariffs to magically fade into the background; they’ll remain a structural consideration that requires both strategic foresight and disciplined execution.
“ better managed until a definitive policy resolution emerges.”… or the next potus vindictive tweet. Not normal or logical times.
As Craig noted, above, convoluted and chaotic. Importing stuff from abroad today is not a simple process for the importer, as it hides the ridiculously complicated series of determinations that every U.S. importer must make for every item they wish to bring into this country. Importing is a multistep labyrinth, an incomplete process that still leaves stuff out, leaves interpretation to the officials at the ports, and will likely change in significant ways.
For both consumers and companies, the full impact has not been felt. Even as of today, there remains pre-tariff inventory in the system. We can’t ignore that over 50% of tariffs become components in U.S.-manufactured goods. Prices are prices, and consumers get used to them over time. But there is no comfort for the importer in knowing what tomorrow is going to be like.
The random application of tariffs has already caused significant disruption. In 2026, I have zero expectations for relief or that this imposed chaos will abate. For retailers, this means even more discipline in managing their sourcing strategies by reengineering supply chains and points of origin. They will need to find ways to control costs to alleviate impact on customers and their bottom line.
Sadly, the administration has demonstrated repeatedly that promised relief rarely materializes. This is a time to be nimble in sourcing strategies.
Can a retailer become accustomed to uncertainty? (Can anyone?) Tariffs are an issue not because retailers may have to raise prices due to higher costs, but because of the uncertainty. We can’t predict what they will be a month, six months, or a year from now. The volatility makes it difficult to plan and forecast for the future. At some point in the future, retailers may become accustomed to uncertainty, but for now, it is frustrating and sometimes terrifying.
There is zero reason to beieve that we will see any voluntary relief from the tariff chaos any time soon. Not from a “tariff is my favorite word” administration. If some form of tariff relief does come, it will be driven by the need to create some kind of smoke-and-mirrors talking points prior to the mid-term elections. The raging debate over “affordability” is not going away any time soon. So we definitely have short term uncertainty. And we definitely have long term uncertainty in that there is absolutely no visibility in how this all shakes out over over the next couple of years. On again, off again. Up. Down. This country. That country.
What company, what brand, what product category can possibly plan and manage their supply chain in that kind of environment? Present day chaos + short term uncertainty + long term uncertainty is not exactly text book business management. Life and retail already had their fair share of chaos and uncertainty. Magnifying and adding more was not what the economy needed.
Tariffs have become something retailers live with, but that does not make them easier to manage. The hardest part is not the cost itself. It is the uncertainty. When policies can change quickly, planning inventory, sourcing, and pricing turns into a series of cautious decisions instead of confident ones.
Most retailers have adjusted by spreading sourcing and building buffers, but those moves come with tradeoffs. Cash gets tied up, inventory risk increases, and passing costs on to customers is harder as affordability tightens.
Some targeted relief may happen, but it is risky to plan around it. The retailers that will handle 2026 best are the ones staying flexible, keeping commitments tight, and preparing for volatility rather than waiting for it to go away.
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The current president loves tariffs but doesn’t understand them. The White House will continue to change tariffs and re-impose them all next year, to the consternation of retailers and the annoyance of customers. Things will likely get worse before they improve.
“The current president loves tariffs but doesn’t understand them.” That is an understatement.
Headaches in 2026 will get worse as the reality of tariff increased prices hit home even more dramatically for customers. So while 2025 was filled with anticipating fear and first encounters, 2026 is when reality hits retailers fully. It will be a difficult year.
Tariffs have not gone away. And, if anything, they become more of an issue: 2025 was a year of partial tariffs, whereas the full force will be felt in 2026. That said, I don’t expect retailers to pass the pain across in full – but that means many will take a hit on margins or will have to make cuts elsewhere. Costs have gone up and rebalancing retail models will cause pain in some form or another.
So which is it, relief or even more convoluted than it is already? Whichever it will remain chaotic, IMHO only a fool would claim otherwise.
Retailers have started to and continue to endeavor to attenuate the impact of tariffs by employing a variety of tactics. However, many if not most of the tariffs continue to impact costs. Retailers can’t just “eat the difference.” That is not good business. Changing the playing field is going to take time. more than a few months. It’s like bringing a supertanker to a full stop (20 miles). So the conclusion is that tariffs are going to impact retail pricing and for at least a year, and maybe longer. The only thing that will bring prices down sooner rather than later;ater, is to drop the tariffs.
that “supertanker” is fueled by emotions and may not stay on any course.
–Dropping the tariffs is an importer’s legal issue.
–What retailers/commerce would do is secondary game. Some may want to recoup their margin (keep prices higher). Same as the endless pandemic recovery… the abuse of the ‘supply chain’ excuse.
The tariffs haven’t fully worked their way through the economy yet as:
a) many businesses overstocked pre-tariffs in Q1
b) with tariff policy constantly changing, many retailers chose to eat the costs to avoid losing market share until there is greater certainty
c) likewise, some suppliers chose to subsidize some of the tariff impact
But in 2026, the pressure on margins will likely force those businesses holding back to start passing on the cost of tariffs. Supply chains often take years, if not decades, to build. So the disappearance of lower-margin players won’t be easily replaced and we will all need to accept that there will be less choice in the market. Even if I want to buy from brands I like in the US, I can’t anymore as many have simply stopped shipping to Canada, and vice versa.
Tariffs have certainly ceased to feel “new” to many retailers and vendors — the playbooks are more developed, and supply chain teams are more adept at hedging, sourcing alternatives, and absorbing cost pressures. But familiarity isn’t the same as immunity. Even seasoned operators feel the drag of persistent tariff uncertainty because these are real cost inputs that ultimately shape pricing, margin, and sourcing decisions. In that sense, I don’t think tariffs will be less disruptive in 2026; they’ll just be better managed until a definitive policy resolution emerges.
That said, resilience has been a defining theme across retail and consumer brands, and the American consumer has remained surprisingly robust in the face of inflation and higher interest rates. But resilience isn’t limitless. As we look toward 2026, potential headwinds in employment and economic growth could expose the fragility beneath the surface — especially if tariff costs get passed through at a time when household budgets are already stretched. The broader macro backdrop matters as much as the policy itself.
The key catalyst now — and the thing most retailers are watching closely — is the pending Supreme Court decision. Relief or confirmation of tariff authority could materially change planning assumptions for sourcing, pricing, and inventory strategies. Until that ruling lands, confidence in notable tariff relief has to be tempered with caution. Retailers will continue to build operational defenses, but lasting stability depends on clarity from the policy front. In the absence of that, we shouldn’t expect tariffs to magically fade into the background; they’ll remain a structural consideration that requires both strategic foresight and disciplined execution.
“ better managed until a definitive policy resolution emerges.”… or the next potus vindictive tweet. Not normal or logical times.
As Craig noted, above, convoluted and chaotic. Importing stuff from abroad today is not a simple process for the importer, as it hides the ridiculously complicated series of determinations that every U.S. importer must make for every item they wish to bring into this country. Importing is a multistep labyrinth, an incomplete process that still leaves stuff out, leaves interpretation to the officials at the ports, and will likely change in significant ways.
For both consumers and companies, the full impact has not been felt. Even as of today, there remains pre-tariff inventory in the system. We can’t ignore that over 50% of tariffs become components in U.S.-manufactured goods. Prices are prices, and consumers get used to them over time. But there is no comfort for the importer in knowing what tomorrow is going to be like.
The random application of tariffs has already caused significant disruption. In 2026, I have zero expectations for relief or that this imposed chaos will abate. For retailers, this means even more discipline in managing their sourcing strategies by reengineering supply chains and points of origin. They will need to find ways to control costs to alleviate impact on customers and their bottom line.
Sadly, the administration has demonstrated repeatedly that promised relief rarely materializes. This is a time to be nimble in sourcing strategies.
Can a retailer become accustomed to uncertainty? (Can anyone?) Tariffs are an issue not because retailers may have to raise prices due to higher costs, but because of the uncertainty. We can’t predict what they will be a month, six months, or a year from now. The volatility makes it difficult to plan and forecast for the future. At some point in the future, retailers may become accustomed to uncertainty, but for now, it is frustrating and sometimes terrifying.
There is zero reason to beieve that we will see any voluntary relief from the tariff chaos any time soon. Not from a “tariff is my favorite word” administration. If some form of tariff relief does come, it will be driven by the need to create some kind of smoke-and-mirrors talking points prior to the mid-term elections. The raging debate over “affordability” is not going away any time soon. So we definitely have short term uncertainty. And we definitely have long term uncertainty in that there is absolutely no visibility in how this all shakes out over over the next couple of years. On again, off again. Up. Down. This country. That country.
What company, what brand, what product category can possibly plan and manage their supply chain in that kind of environment? Present day chaos + short term uncertainty + long term uncertainty is not exactly text book business management. Life and retail already had their fair share of chaos and uncertainty. Magnifying and adding more was not what the economy needed.
Tariffs have become something retailers live with, but that does not make them easier to manage. The hardest part is not the cost itself. It is the uncertainty. When policies can change quickly, planning inventory, sourcing, and pricing turns into a series of cautious decisions instead of confident ones.
Most retailers have adjusted by spreading sourcing and building buffers, but those moves come with tradeoffs. Cash gets tied up, inventory risk increases, and passing costs on to customers is harder as affordability tightens.
Some targeted relief may happen, but it is risky to plan around it. The retailers that will handle 2026 best are the ones staying flexible, keeping commitments tight, and preparing for volatility rather than waiting for it to go away.