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Tariffs and Trade War Nudge Consumers Toward Buying Made-in-America Goods

American consumers have endured more than a year of trade tug-of-war as the U.S. and China volley one tariff after another at each other in a dispute that seems to be escalating out of control.

Now, shoppers point to tariffs—landing in the home stretch of the back-to-school season and just as retailers are putting a bow on their holiday plans—as the primary reason why they’re giving their retail preferences and shopping habits a second look.

And significant changes to those behaviors could rewrite expectations for retail in November and December.

Shopkick, an Android and iPhone app that offers shopping rewards, gathered consumer insights on how the duties on imported Chinese goods are changing where and how people shop. The data, culled from surveys with more than 30,000 U.S. adults, reveals that people are already seeing higher prices hitting store shelves—and more pain could lie ahead now that President Trump has announced tariffs on the remaining $300 billion of Chinese goods, including clothing, shoes and other textiles.

More than 60 percent of the survey group is aware of the tariff threat—not surprising given the constant headlines trumpeting each new duty and its potential fallout.

Of that group, two-fifths believe retail prices are ticking upward already. And though consumers expect higher prices in stores to drive up their household expenditures, opinions vary over how much more tariffs will inflate their annual expenses. Thirty percent are bracing for threatened tariffs to pry $1,000 or more out of their bank accounts, while 38 percent anticipate an increase of half that amount.

Paula Rosenblum, managing partner with RSR Research, agrees that the specter of tariffs is looming at a particularly bad time for the retail industry. “If these tariffs happen, they’re going to make a real mess of the holiday season and spring 2020,” she wrote in a blog post.

Shopkick’s numbers second that sentiment. For one, 60 percent of consumer claim they’ll reconsider the retailers they shop regularly, likely in hopes of finding lower prices elsewhere. And a good number (44 percent) just won’t shop as much as they usually do—removing those dollars from the economy altogether.

Much as importers and retailers have pulled forward Chinese shipments over the past year in an attempt to get ahead of threatened tariffs, less than one-third (29 percent) of the polling sample plans to do the same—“stocking up on goods now,” Shopkick said, to avoid the potential pain of prices creeping up.

And though consumers often have short memories, there could be a silver lining in the trade spat for domestic producers. One quarter of consumers claim they’ll align their loyalties to Made-in-America goods in reaction to the trade war, according to Shopkick. Whether the rubber meets the road, however, remains to be seen.

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