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“There’s a new tariff in town,” Joyce Chang, chair of global research at JPMorgan, said at the NRF Big Show in Manhattan on Sunday. With President-elect Donald Trump’s inauguration next week, the economist broke down what his administration’s proposed tariffs could mean for retailers. In short, “higher tariffs means higher cost,” she said.
- This tracks with NRF’s own forecast about the potential impact of tariffs, which it said will reduce consumer spending power by $46–$78 billion.
However, reversing the tide of global trade could be an uphill battle. Chang noted that the US is currently importing more goods from China than it did before Trump took office in 2016. The difference now is the scope of the proposed tariffs. “One of the big differences between Trump 1.0 and 2.0 is that this is not just about China,” she said. “The first set of tariffs that he announced was actually on Mexico and Canada.”
As a result, supply chain diversity could be more of a priority going forward, she added.
But CEOs aren’t necessarily shaking in their boots. In a keynote speech later in the day, Macy’s CEO Tony Spring said, “This isn’t our first rodeo,” and that Macy’s is having similar conversations that it had with production partners back in 2016 and 2017.
He also noted the company wants a “fair relationship” with the rest of the world, and that “negotiated tactics sometimes will come into play.”
As for immigration, Spring said, “we want to be a destination…for people who want to work, but we want to do it legally, and so this is a tough and complex problem.”
Looking at the broader economic picture, Chang said Trump’s policies could be a mixed bag: While tariffs and reduced immigration could slow economic growth, continued fiscal spending and deregulation could boost growth.