According to a study by Harvard Business School tracking the tariff impact, prices of imported goods were already about 5.4 per cent higher in September compared to pre-tariff trends.
Prices of domestic goods have also risen by around 3 per cent, particularly in categories that directly compete with imports.
That pressure is changing consumer behaviour.
A survey by financial services firm Nationwide found two in five Americans plan to spend less this Christmas by buying fewer gifts, choosing cheaper alternatives or skipping gift-giving altogether.
RETAILERS UNDER PRESSURE
Retailers are also feeling the heat.
At low-cost goods store Lot Stop, buying assistant supervisor Girish Makwana said foot traffic has remained steady, but sales have declined.
“It’s not really as good as last year,” he added. “The buying capability …is low because of tariffs and all these things.
“We are struggling with a lot of competitors in the online market as well.”
Product labels throughout the store show many items are made in China and Vietnam – countries whose exports are subject to higher tariffs introduced under US President Donald Trump as part of a broader effort to reduce America’s trade deficit.
Makwana said higher costs are squeezing margins, but raising prices could risk driving customers away
“What’s going on regarding the tariffs and the rates, we don’t know,” he said.
“Customers are afraid. They are trying to save their money. They are not spending as much as they wanted to spend.”
As inflationary pressures persist and tariffs continue to bite, analysts say lower-income communities and retailers more dependent on imported goods are being hit harder than others.
Randy Peers, president and CEO of the Brooklyn Chamber of Commerce, said immigrant-owned businesses are among those most affected by higher import duties.
“Heavily-immigrant communities that import a lot of products from their home countries – to sell to the local market and immigrants from that community – have some challenges,” he added.
“They’re seeing some very basic products increase in terms of the prices, and they’re concerned about not wanting to pass those costs along to their consumers in many cases.”