You may have heard that the Donald Trump tariffs on Canada, Mexico, and China are wreaking havoc and confusion on the retail industry. We know it’ll likely affect prices on everything from groceries to tech—but it’s hard not to wonder: will it also affect the everyday brands and stores we regularly shop?
It’s true that brands like Aritzia, Lululemon, Shein, and SSSense hail from countries that are being targeted by the Trump tariffs that he announced earlier this month. But does that mean we’ll be paying 25% more for leggings? Do we need to panic buy Aligns and Super Puffs? Is this the end of the shopping haul as we know it?
Not exactly. Like many other parts of the Trump administration’s policies and the GOP agenda as a whole, a lot of these executive orders imposing tariffs are light on specifics that clarify how they’ll work in practice.
Glamour spoke with some retail experts to get the details on what could be ahead, and what you should do to prepare for potentially higher consumer costs.
Explain it to me like I’m 5. What is a tariff and what did Trump do?
A tariff is essentially a fancy word for a tax.
On Feb. 1, the president announced that he would be imposing a 25% tariff (tax) on goods coming into the US from Canada and Mexico, and a 10% tariff on goods coming into the country from China.
This, he said, was because he has a goal of “halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.” He added that “access to the American market is a privilege.”
Two days later, on Feb. 3, the administration announced that the announced tariffs on Mexico and China would be paused for one month after both countries agreed to increase border controls, according to Reuters, and negotiations were set to continue. There was no such agreement with China, which imposed retaliatory tariffs on the US this week.
In the executive order announcing the tariffs, Trump also repealed the de minimus tax exemption which allows packages under $800 that are heading into the US to enter without duty or taxes. That is also, now, currently on pause.
Who is going to pay these new higher taxes on imports from Canada, Mexico, and China??
Not the governments of these three countries. The tax will be absorbed by the business that is importing the products into the US, and that cost has to go somewhere. Companies may be able to absorb some of the costs, but likely will have to pass some of them along to shoppers.
“There’s going to have to be cost-sharing between the companies and consumers,” says Angela Santos, an attorney with the firm ArentFox Schiff who specializes in advising retail companies on compliance with federal regulations. “That’s going to be really difficult, especially now with inflation and rising consumer prices already. I think that’s going to affect prices at the mall, prices at stores, and likely result in a decrease in sales because consumers won’t be able to afford things.”
She adds that the Canada and Mexico tariffs especially could raise prices on those goods dramatically.
“A 25% increase is pretty high,” she says. “Especially in this market where everyone’s looking for a deal, everyone’s looking for sales. Retailers will have difficulty marking down products as much if they have to absorb tariff increases to this extent.”
If some of your favorite brands like Lululemon and Aritzia are Canadian, does this mean they’re going to be 25% more expensive?
Not necessarily. Last month, Lululemon’s CEO Calvin McDonald told CNBC that less than 5% of his company’s goods were produced in Canada, Mexico, and mainland China (according to the Wall Street Journal, the company makes its goods in Cambodia, Sri Lanka, Indonesia, Bangladesh, and other Asian countries).
So, although Lululemon is a Canadian company (headquartered in Vancouver), it’s not producing most of its clothing there. Aritizia, similarly, has manufacturing facilities in a variety of places including Cambodia, China, India, Peru, Portugal, Romania, Sri Lanka and Vietnam.
Most major retailers have this kind of varied supply chain to avoid this exact scenario of tariffs tanking their entire business.
So what is the impact going to be?
Extremely unclear. The experts who spoke with Glamour say one of the challenging things about these orders from Trump is that a lot of the details are opaque and changing rapidly.
And, Santos notes, it’s unclear if more tariffs are on the way.
‘There have been tariff threats on nearly every country,” she says. “It makes it much more difficult for companies to plan and shift production or make those huge investments in shifting production or creating manufacturing operations in another country and training employees, et cetera, when there’s unpredictability about whether tariffs will be imposed on those countries.”
It’s going to take retailers going through their systems and calculating exactly where and how they will be impacted—and in what areas—before we have a clearer picture of what the impact on consumers will be.
One of the tasks Santos has is working with retailers to figure out how to minimize these costs, she explains.
“We try to find creative ways to at least lower the overall tariff liability and hopefully that means lower overall impact to consumers,” she says.
What about China? Will the possible repeal of the de minimus exemption—plus the 10% tariff—will make shopping at online retailers like Shein and Temu more expensive?
Right, so the de minimus exemption repeal is a whole other issue that could be costly for online shopping. This tax exemption basically means your online shopping hauls from places like Temu and Shein come to you more quickly and more affordably.
But as part of the tariff executive order, Trump also got rid of this exception, which according to The New York Times sowed immediate “confusion and chaos” at the US Postal Service. Some women on TikTok reported that they saw an immediate impact from the loss of the exemption, with one saying she saw a duty fee of more than $100 on an order.
On Friday though, Trump reinstated the exemption for cheap shipments until “adequate systems” are in place to, uh, un-reinstate it.
So, like most of the rest of the questions in this article, we don’t really know what’s going to happen there and what the ultimate outcome will be for shoppers.
It sounds like no one really knows what’s happening? What should we be doing?
Yeah, you’re right. Even the experts I spoke to cautioned that this situation is very much in flux, and companies are working to figure out exactly what the impact will be and how they can minimize it.
Blake Harden, the vice president for international trade at the Retail Industry Leaders Association, tells Glamour that’s the number one priority right now—figuring out how to navigate these new tariffs with the smallest possible impact on shoppers.
“The president was elected in large part because of concerns about the economy and his voters are really counting on him to lower inflation to bring down prices,” she says. “Our goal is for trade policy to stay focused and targeted, so that businesses have certainty and consumers are not harmed.”
But there’s one thing Santos says we can probably expect: higher prices. So, if you have the funds to make a big purchase, now is probably the time.
“Buying products, especially high value products, now in advance of possible tariff increases, I think, is a good strategy for consumers,” she says.
The post The Trump Tariffs and the Impact on Brands Like Lululemon, Explained appeared first on Glamour.
