Companies Projected to Pay At Least $1.2T More in 2025 Due to Tariffs

Core Insights - Companies are projected to incur at least $1.2 trillion more in expenses in 2025 than initially anticipated, significantly impacting consumers [1] - Analysts estimate that two-thirds of a $907 billion expense shock will be passed on to consumers, resulting in $592 billion in higher prices [2] - The estimate of $1.2 trillion is considered conservative, with smaller companies being more vulnerable to tariffs and supply-chain costs [3] Company Impact - Fashion firms are experiencing a notable impact from increasing tariffs, particularly as these tariffs extend beyond China [4] - American Eagle reported a $20 million impact from tariffs in Q3 and anticipates at least double that amount in Q4 [5] - Victoria's Secret revised its net tariff impact for the year upward by $50 million, now expecting a total of $150 million [5] Consumer Behavior - Despite the pressure on profit margins, companies are hesitant to raise prices due to consumer sensitivity, as shoppers are reducing non-essential purchases and opting for cheaper brands [6] - Deloitte forecasts a 10 percent contraction in consumer spending during the holiday season [6]