How Trump tariffs may change what you buy and how much you pay on Amazon Prime Day, July 4 and during winter holidays

CNBC

02-05-2025

President Trump said this week that there may be less dolls for children for this year's holiday season amid his tariff war, but the hit to retail shelf inventory is likely to spread across many shopping categories if there is no quick de-escalation between the U.S. and China in the trade war.
As early as July 4, many holiday sales promotions may start to look different, as small businesses that supply big box retail stores review product inventories and discount plans based on tariff economics. Business owners and supply chain executives tell CNBC the next 30 days are critical for trade deals that lift tariffs on China for the manufacturing orders to be placed and prepared to ship to replenish shelves.
Lauren Greenwood, co-founder & president of YouCopia, which makes storage containers, had moved its U.S. manufacturing to China over the past 15 years to meet the demand from retail giant Bed Bath and Beyond. She recently posted on LinkedIn about the temporary shuttering of the factory outside Nanjing, China, which manufactures the majority of YouCopia products, and opened in January 2025.
Greenwood stopped shipments on April 9, and produced goods are being held in China. Products like the company's top-selling item, the StoraLid Container Lid Organizer, are at risk for inventory issues if tariffs continue.
"Our manufacturing has been down for three weeks," said Greenwood. "Come August, there will be some items no longer available, and shelves will be bare."
Recent manufacturing data from China shows how quickly factory work is slowing, with activity at a 16-month low.
Greenwood said the company has three months of inventory, already impacted by the 20% tariff that was in place on Chinese-made goods before President Trump added 145% tariffs.
The 20% tariffs increased the duties on one shipping container of goods from $40,000 to between $75,000-$80,00 with the 20% tariff. "Adding that 145%-plus tariff is not an option," she said.
"We are raising prices between 20-25% now and we are trying to spread the tariff pain by asking retailers, Amazon, Target and Walmart to help," Greenwood said. But she added that "even with this shared pain, our cash requirements of paying a 145%-plus tariff are not manageable. We are not turning production back on unless we see a change in tariffs."
For the first time since Trump's tariffs announcement, China indicated this week it was open to trade talks with the U.S., with certain preconditions including the immediate suspension of the trade duties.
"This is a delicate balance. The next 30 days are critical," Greenwood said.
"Retailers have been trying to mitigate the negative impact of the tariffs for months," said Jon Gold, vice president of global supply chain for the National Retail Federation. "Many front-loaded cargo in advance of the tariffs taking effect, but they have not been able to bring in everything all at once. Retailers also slowed or paused holiday orders, especially from China because they cannot afford to pay the massive 145% tariff. This is especially true for Main Street retailers who are concerned about their future."
Retailers tell CNBC that concerns about inventory will influence planning of holiday season promotions and how many discounts they offer given the expectation for leaner inventories. Less overall product, and inventory that disappears more quickly, are likely for U.S. consumers shopping during the July Fourth holiday weekend sales, Amazon Prime Day in July, and Black Friday and Cyber Monday around Thanksgiving.
Amazon issued soft guidance on Thursday, with its CEO Andy Jassy saying on a call with investors that Trump's on-again-off-again tariffs have made it hard to predict what impact they'll have on Amazon's businesses. "It's hard to tell what's going to happen with tariffs right now," he told investors. "It's hard to tell where they're going to settle and when they're going to settle."
Jassy also indicated there is a wide range of decisions that retail partners may choose to make in response to tariffs. The "diversity" of Amazon's third-party seller base means that some merchants aren't "going to pass all or any of those tariffs on to customers," he said.
Melissa Gad, general manager and brand owner of Colugo, a direct-to-consumer and big box store supplier of strollers and baby carriers, said she expects to run promotions on popular items in July, but that means demand will increase and that raises the likelihood of empty shelves.
Gad said she has stopped all new manufacturing orders for Colugo's consumer-friendly priced $225 stroller made in China.
"This month will be critical in terms of deciding if we un-pause production to meet the upcoming delivery dates for retailers," said Gad. "We are launching new products in both the fall and the spring, and with this wait-and-see mode, we may have a six-month gap in placing orders and launching."
Inventory analysis shows Colugo's popular black Compact Stroller would be the first stroller to go out of stock. The company has less than a one-month supply of that stroller, and up to four to five months in other colors.
Gad has been posting on social media updates on inventories, she said not to scare customers, but to educate them on the impact of the tariffs.
"We have other colors with more stock and we have been communicating with our customers to go and buy a stroller now because if you wait, the color you might want may not be there," Gad said. "We are seeing expecting parents buy items earlier now than normal just to ensure they will have the products they want at a price they can afford."
Colugo is already pulling back on promotions. "Consumers normally see sales for July Fourth, Black Friday, and Cyber Monday. As a brand, we have really pulled back on the promotions because I can't discount my product if I can't get orders in all year," Gad said.
For retailers, the holiday season clock starts ticking in June, said Ted Krantz, CEO of interos.ai, a supply chain data provider, and he added, "If you're placing orders then, you're already late."
Ninety percent of trade is maritime, which can have widely varying lead times, often ranging from two to 10 weeks, he said.
According to interos.ai data, 457,000 distinct U.S. importers import common holiday goods (like apparel, toys, candy and chocolates, jewelry and watches), nearly half of which originate from China.
Krantz said since the four weeks following Trump's "Liberation Day" tariffs announcement on April 2, holiday shipments have dropped 53% from their 2024 levels with U.S. maritime shipments of holiday goods down significantly. The recent freight ship activity on routes from China to the U.S. has plummeted, according to recent CNBC reporting.
"Retailers are weighing the cost of early orders against the risk of missed sales or empty shelves, and for many, peace of mind may be worth the premium," said Krantz. "With tariff volatility driving supply chain disruptions and unpredictable delays, retailers who are betting on their typical holiday playbook may come up short," he added.
Because of the combined time to manufacture (between 45-60 days) and the travel time on the ocean to deliver the freight, railroads and trucking companies are notified by U.S. importers in June as to how many containers will be brought in by their clients so they can make sure they have enough trucks, chassis, and rail equipment ready for pickup and delivery of those containers arriving in August and September.
Alan Baer, CEO of OL USA, said while holiday orders have already been placed, they have been put on hold, and even if some orders are placed in June, there is no guarantee the full orders will be placed.
"The combination of tariffs and possible consumer reluctance and the possibility of a reduction in tariff levels is adding to the confusion, and stretching the overall order cycle," said Baer. "Importers want to avoid getting hit with higher than necessary amounts if a reduction is truly possible in the near future."
Baer said the shipping window remains open now, but it may close sooner than expected if blank (canceled) sailings expand. According to data from supply chain intelligence firm Project44, there has been a 300% increase in blank sailings from China to the United States since "Liberation Day."
The International Longshore and Warehouse Union, which works the West Coast ports hit hardest by the pause in China orders, issued a recent statement that said that "reckless, shortsighted policies have begun to devastate American workers, harm critical sectors of the economy, and line the pockets of the ultra-wealthy at the expense of hardworking families."
As the freight business responds to the pause in U.S. orders, the ripple effects widen for the marine shipping business.
"I hear that ships are not being laid up but being redeployed to other trade routes like Asia to Latin America," said Andy Abbott, CEO of Atlantic Container Line. "Even if a deal was made with China, it will take at least 4-6 weeks for the vessels to come back because they are not waiting around China. So our discussions about the difficulty of getting 'Little Johnny's' Christmas toys' on the store shelves in time for Black Friday become very valid."
There is an opportunity for suppliers and retailers to close the China gap by increasing orders from other manufacturing locations, a situation in which companies reliant on Chinese manufacturing may lose but the shelves do not run empty, even if overall inventory is lower while prices run higher based on global tariffs. Paul Brashier, global supply chain vice president for ITS Logistics, is more optimistic about the outlook for retail holiday season stocking based on movements he is seeing in orders outside China.
"While our data projects Chinese imports will see a cliff event as early as next week, our volumes from India, Southeast Asia and the rest of the world seem to be buoying our overall inbound volumes as shippers continue front loading to fulfill consumer demand and gain market share from Chinese suppliers," he said. "I do not see a considerable chance for empty shelves but instead products from areas manufactured outside of China grabbing that shelf space."