Retailers are acting boldly and in big numbers to defend their businesses amid a trade war with no end in sight.
Well over half of U.S. merchants surveyed by Talker Research for Signifyd say that because of tariffs and threats of additional tariffs, they have shifted production from one country to another, pulled imports forward ahead of higher import taxes, changed suppliers and limited the countries they sell into. Specifically, by the numbers:
- 76% of respondents said they had raised prices to offset tariffs.
- On average, merchants said they’d pass along 51% of tariff costs to customers.
- 75% said they had limited promotions and discounts to cushion the blow of tariffs.
- 63% reported implementing hiring freezes to find savings to balance tariffs.
- 58% said they’d closed physical stores, warehouses or other physical operations to offset tariff costs.
- 55% reported laying off employees in response to tariffs.
The survey’s high percentage of merchants who are passing higher costs along to customers mirrors reports from the Federal Reserve, which found that about 75% of businesses are increasing prices to reduce the pain. The survey of 500 representatives of U.S. retailers with ecommerce operations was conducted between May 27 and June 2 and revealed an industry that is hardly in a wait-and-see posture, despite significant uncertainty on how the global trade war will play out. Survey respondents took multiple steps to cut costs and reduce their exposure to tariffs. The chart below shows the percentage of merchants who said they had taken the steps listed in an effort to mitigate the new and coming import fees.
U.S. merchants moved boldly in response to tariffs |
The work to get in front of tariffs began for some merchants in early 2024 when tariffs were emerging as an issue in the year’s presidential campaign. The activity peaked (for now) in the first quarter of 2025, according to the Talker survey. Survey respondents, who were asked to select all steps they had taken to address tariffs, steadily ramped up their activity as campaign promises turned to trade policy.
Despite the uncertainty and upheaval, 45% of respondents said tariffs had a positive effect on their business, while only 31% viewed the effects as negative. And 70% expressed confidence that they would meet their revenue and sales forecasts into the fourth quarter.
78% of merchants worry about tariffs’ future effects, survey says
However, 78% were worried about tariffs’ future effects — saying they were concerned about what import taxes would mean for their businesses in the next six to 12 months.
Already, most retailers are grappling with supply chain disruptions, with 73% saying that is a tariff-induced problem today. And significant proportions of retailers’ inventory are affected by tariffs that are in place now and would be further impacted by the return of reciprocal tariffs, including big boosts to levies on products from China.
On average, 53% of the products merchants sell online are subject to current tariffs, according to the survey. The figure is the same for products subject to Chinese tariffs, according to respondents.
Besides the direct cost of tariffs, merchants expressed concern about the potential for changing trade policies to increase their exposure to fraud and abuse. Along with new and higher tariffs, the Trump administration closed a loophole that allowed shipments from China and Hong Kong valued at under $800 to enter the U.S. duty and tariff free.
Customs bottleneck expected to cause a rise in first-party fraud, merchants say
Requiring those packages — approximately 700,000 a year — to go through U.S. Customs resulted in a substantial bottleneck and a significant disruption. The concern is that the resulting delays in delivery of ecommerce packages could lead to an increase in customer disputes and chargebacks — even when such delays are no fault of the merchant involved. The chaos could also open the door to fraudsters and untrustworthy consumers who take advantage of the confusion and find ways to keep products they receive while also receiving a refund.
More than half of the merchants surveyed — 55% — said they expect to see an increase in non-fraud chargebacks due to delays and confusion at U.S. Customs facilities as people and processes become accustomed to the new requirements and procedures.
The Talker Research survey of U.S. retailers was conducted at a time when President Trump’s 10% global baseline tariffs were in place and higher tariffs affecting those who import goods from Canada, Mexico and China were also in place. Trump paused until July 9, reciprocal tariffs that raised import taxes to levels over 200% for China. Those tariffs are also the subject of legal challenges.
Death of de minimis brings relief for majority of merchants
The survey’s other notable findings include:
- 54% said ending the de mininis exemption, which exempts imports valued at under $800 from tariffs and inspection, will help their business. The Trump Administration ended the exemption for China and Hong Kong, but it still applies to most countries.
- 18% said ending de minimis would be harmful to their business.
- Of the 61% of merchants who diversified their product-sourcing to lower their tariff burden, 31% shifted to Mexico, 16% moved to Vietnam, 12% moved to Taiwan, 12% shifted to India, 11% looked to Singapore, 11% to Brazil, 10% to the Philippines, 9% to Malaysia, 6% to Egypt, 4% to Cambodia and 2% shifted elsewhere.
Photo by Getty Images
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