Major retailers anticipate higher costs and possible store closures
Retail in the United States has always been unpredictable, but the latest round of tariffs proposed by the Trump administration could intensify those uncertainties. Five years ago, stores were struggling with forced closures and declining foot traffic. Now, they are bracing for a new challenge that could disrupt pricing, sourcing and working conditions in the coming months.
Understanding the potential impact of Trump’s tariffs on labor and retail supply chains in the United States
Tariffs are essentially taxes on imported goods. The administration’s plan includes imposing the following rates on imports from key trading partners:
| Country | Proposed Tariff Rate |
|---|---|
| China | 34% |
| Vietnam | 46% |
| Taiwan | 32% |
| India | 26% |
| South Korea | 25% |
| Japan | 24% |
| EU | 20% |
Walmart and Kohl’s, which rely heavily on merchandise from Asia, could suffer immediate impacts. There could be price increases on items such as clothing and household goods, directly affecting employee hours, scheduling and the overall US labor market if consumer spending declines.
Why physical businesses face greater risks amid these proposed tariffs in the US
Tariffs increase the cost of imported goods, a burden that often falls on retailers with large physical stores. Kohl’s, for example, has already closed dozens of stores in 2025. With significant tariffs on products from China or Vietnam, it may be pressured to raise prices or look for new suppliers. Smaller retail operations, once decimated by pandemic closures, risk further setbacks if major players reduce their overheads by cutting staff or local presence.
Measures that retailers and their employees can take to manage the growing tariff pressures
Can they be fined for not complying with the new import taxes? The answer is no, but they must follow legal import guidelines or risk losing permits or suffering supply disruptions. To address this situation, many are examining domestic production lines or negotiating directly with suppliers to absorb some of the costs. Here is a short list of possible strategies:
- Renegotiate contracts: Retailers could ask suppliers to share the costs related to tariffs.
- Diversify the supply chain: explore products from countries with lower tariffs or no new tariffs.
- Optimize inventory: avoid overstocking high-tariff items.
- Rationalize labor costs: reassign or retrain employees in areas of higher demand.
These measures could help major retailers remain stable and protect jobs in the short term. In 2020, nationwide lockdowns forced a shift to online shopping. Walmart adapted by strengthening its e-commerce presence, but Kohl’s struggled, closing stores and cutting partnerships to reduce losses. Now, with the threat of tariff increases, the stakes are different, but still formidable. Brick-and-mortar establishments need competitive prices to attract cautious consumers. Meanwhile, senior management must balance worker retention and rising operating costs.
Trump’s proposed tariffs could reshape the retail sector once again, leading to possible store closures, changes in the supply chain and new staffing decisions. While large retailers such as Walmart can pass on costs or renegotiate with suppliers, chains such as Kohl’s could be left in a vulnerable position. If tariffs lead to significant price increases, it could be the tipping point for retailers still recovering from pandemic losses.