Tariffs Threaten 2025 Holiday Sales With Higher Prices, Job Cuts

Core Insights - U.S. tariffs are negatively impacting business profitability, with one in three companies reporting declining or deferred sales due to tariffs, and nearly all (97%) seeing no sales increase [2] - Retaliatory tariffs from other countries are also affecting U.S. exports, with a majority of companies experiencing sales declines in foreign markets ranging from 6-25% [3] Rising Prices and Inflation Pressure - Two-thirds of companies have passed on up to half of their tariff costs to consumers, with 21% passing on more than half, a significant increase from 13% in July [4] - Looking ahead, 42% of executives expect to raise prices by up to 5% in the next six months, while 29% anticipate increases of 6-15% [4] Uncertain Outlook Ahead - Many companies are considering bringing manufacturing back to the U.S., but nearly half of executives believe this will take 1-2 years, and one-third estimate 2-3 years [5] - 77% of executives do not feel fully confident in the stability of current U.S. tariff levels, with 44% expecting uncertainty to persist over the next year [5][6] Impact on Retail - Consumers are expected to face higher prices during the holiday season, which may affect discretionary spending [7][8] - Retailers are being cautious with inventory commitments for the holiday season, prioritizing risk management over maximum profitability due to the uncertain environment [9][10] - The current environment is leading to a defensive approach among brands, limiting inventory, slowing hiring, and protecting profits through higher prices [10]