U.S. retailers are beginning to feel the pressure of escalating trade tensions with China. It appears that there will be no winners and losers, and the trade war impact on retail will be high. While stores are not yet fully empty, analysts and supply chain insiders warn that shortages could begin showing in the coming months. Sectors such as toys, fast fashion, and budget home goods are likely to be hit first, where low-cost imports dominate the shelves.
Casey Armstrong, CMO of global fulfillment platform ShipBob, warned: “The U.S. retail system is built on speed and scale. When that engine stutters — whether from tariffs, customs delays, or sourcing constraints — it’s the lowest-margin, fastest-moving goods that disappear first.”
Trade war impact on retail: Apparel, footwear, and kids’ products among the first to go
Apparel and footwear are particularly exposed. In 2024, 37% of U.S. apparel and 58% of U.S. footwear imports came from China. According to Steve Lamar, president of the American Apparel and Footwear Association, some tariffs have reached over 200%. “These prohibitively high new tariff rates operate as an import ban,” he said, noting the industry had little time to adjust sourcing strategies.
“They will translate soon into product shortages as orders are cancelled or goods are held in warehouses until a trade deal can be worked out.”
Toys and seasonal kids’ goods are expected to vanish first. “There is often fast turnover on apparel, and thin margins mean low buffer stock,” Armstrong added.
Walmart, IKEA, and Amazon are already pulling back on Chinese orders. Smaller retailers and online sellers could suffer even more. “Consumers should be prepared for less inventory and fewer choices, and increased prices,” said Jonathan Gold from the National Retail Federation.
Freight disruptions drive uncertainty
Shipping data points to a steep drop in freight activity between China and the U.S. Sea-Intelligence CEO Alan Murphy highlighted that carriers are cancelling sailings with little notice. “For the Asia-North American East Coast, there is now a major spike in blank sailings for the week starting on May 5, which is quite extreme,” he said.
According to Sea-Intelligence, in late April and early May, cancelled vessels represented 35%-42% of planned capacity.
Retailers that frontloaded goods to stay ahead of tariffs may cushion the blow temporarily. But with talks between the U.S. and China reportedly stalled, the longer-term impact could stretch into the winter shopping season. Jonathan Gold of the National Retail Federation warned: “Consumers should be prepared for less inventory and fewer choices, and increased prices, especially at small retailers.”
Michael Salerno of FNBO added, “We are looking at port container volumes mid-May, June, and July. It’s too early to tell right now.”
If the tariffs stay high, shortages will likely grow worse in the winter season. Of course, this is right when holiday shopping kicks into full gear.
