America’s largest trading partners — and the retailers that do business with them — were impacted Tuesday when sweeping tariffs on Canada, Mexico, and China went into effect. President Donald Trump, less than 100 days into his second term, has said the tariffs serve the purpose of pressuring those countries to stop the flow of illegal drugs and migrants into the United States. The tariffs have added a 25 percent fee on all Mexican and Canadian exports coming into the U.S. and an additional 10 percent fee on Chinese goods. (Trump imposed a 10 percent tariff on Chinese goods in February.) Additionally, a 25 percent tariff on steel and aluminum from most countries is set to take effect March 12. Canada, Mexico, and China account for more than 40 percent of U.S. imports, according to The New York Times.

The backlash was swift on Tuesday, with global markets tumbling and all three countries announcing retaliatory measures, the Associated Press reported. The Yale University Budget Lab estimated that Trump’s tariffs amount to a tax hike of roughly $1.4 trillion to $1.5 trillion over 10 years, which would disproportionately affect lower-income households.

Beth Hughes, vice president of trade and customs policy at the American Apparel & Footwear Association (AAFA), and Blake Harden, vice president of international trade, Retail Industry Leaders Association (RILA), spoke to Women in Retail Leadership Circle (WIRLC) members in late February about the knowns and unknowns of Trump’s threatened and existing tariffs as well as how they could affect retailers’ businesses going forward.

“What we’ve seen is, the president has come out of the gate laying the framework for not just near-term, but long-term intentions to use tariffs to achieve different policy goals,” Harden summarized.

‘We’re Learning as You Learn’

A haze of uncertainty permeates around both what additional tariffs might be coming down the governmental pike, as well as what possible effects they will have on retailers, Hughes said.

“We’re learning as you learn what this might mean for our industry, and … what it might mean for consumers, the folks, the families, the Americans that actually pay the tariffs at the end of the day,” Hughes said.

When asked how Trump’s tariff actions in his first few weeks in office compare to previous administrations, Hughes said Trump’s actions in his second term would be “fast and there’s going to be chaos and no one is necessarily going to know what’s going on, but that’s the point.”

Hughes added that Trump aims to provide some kind of leverage against trading partners, and that there “really wasn’t a trade policy” discussion during the Biden administration. “[The Trump administration] is certainly running full speed ahead and we won’t see that stop anytime soon.”

Harden said the difference now compared to eight years ago when Trump was first elected is that in his first term he was surrounded by advisors who in many cases tried to slow his agenda down, and a Congress that was more interested in free trade. That’s not the case in 2025.

“They are coming in fast and furious on a whole host of issues — trade being one of them,” noted Harden. “I think there’s a determination to try to get as much done as quickly as possible before they’re stopped at any particular turn. All of us are going to have to get used to the idea that uncertainty is part of the president’s approach.”

Preparing for Uncertainties

“Preparing for uncertainties” is an oxymoron for this administration, but Harden said there are still steps retailers can take while they fly blind when it comes to tariffs.

“Thinking about where your flexibilities are in your supply chain in case you do have to pivot quickly is super important,” Harden said. “We’re recommending to folks to look out to where we have the largest trade deficits and be prepared that those countries will be targeted at some point this spring.”

According to the Bureau of Economic Analysis, those countries include China, Mexico, Vietnam, Ireland, Germany, Taiwan, Japan, South Korea, Canada, and many countries in the European Union.

“My sense is that in many cases, the administration will want to get a commitment from those countries to buy more U.S. stuff,” Harden said.

Harden also advised retailers to do a deep dive into who and what is in their supply chain. She predicted there would be much scrutiny around Chinese-owned entities operating in other countries. Therefore, making sure you know how your entire supply chain is connected would be beneficial.

Hughes said she advised AAFA members to speak to their suppliers and urge them to go to their own governments and get information on how they’re preparing to handle any targeted confrontations from the U.S. government about trade deficits.

Another couple of unknowns: When retailers — and potentially their customers — will start to see price increases from tariffs, and how retailers plan to offset the additional costs associated with tariffs. Hughes said if the past is any indication, retailers will either split the additional cost with their supplier or pass the additional cost along to the consumer.

Media reports from Tuesday suggest that customers could see price increases sooner rather than later. Target’s CEO said Tuesday that customers could expect to see price increases on fruits and vegetables in the coming days, and Best Buy’s CEO said price increases were “highly likely,” according to reports from NBC News.

David French, the National Retail Federation’s executive vice president of government relations, said in a statement Tuesday that Trump’s tariffs “will only hurt hardworking Americans and the businesses that strive to provide customers with the products they want and need on a daily basis.”

“Tariffs are just one tool at the administration’s disposal to achieve a secure border, and we urge it to explore other options to accomplish the same goals,” French said. “As long as these tariffs are in place, Americans will be forced to pay higher prices on household goods.”

Women in Retail Leadership Circle members can watch the full workshop with Harden and Hughes on-demand. Not a member? Apply today!