New York
CNN
—
You’re about to feel the effects of President Donald Trump’s trade war every time you shop.
In a matter of weeks, infinite varieties, colors, sizes and flavors will be replaced with smaller selections, fewer options and limited choice. It will represent a stark change from what consumers have been accustomed to at stores and online.
As free trade blossomed over the past five decades, the number of imported goods on shelves tripled between 1972 and 2001, research shows, equivalent to a 2.6% rise in GDP. Grocery stores now stock around 30,000 different items, Walmart sells 120,000 goods at its superstores and Amazon’s online catalog contains millions of products.
But Trump has implemented a 10% universal tariff on virtually every product entering the United States — with higher rates for certain goods — and 145% tariffs on China, essentially a trade embargo on the world’s second largest economy. That could limit choices for shoes, bags, toys and many other products.
“To me, that’s going to be one of the biggest casualties of tariffs. You’re going to see far less variety than you would have otherwise,” said Jason Miller, a professor in supply chain management at Michigan State University.
Already, companies are struggling with tough decisions over which products they can still offer under the steep tariffs, eliminating items that are either too expensive to produce or that shoppers will abandon over price hikes. Companies are cancelling products made in China and buying only their top-selling items from manufacturers in other countries where they can negotiate lower prices. They are also suspending product launches and new innovations they’ve spent years preparing.
Many companies compare the havoc of Trump’s tariffs on supply chains to factory shutdowns during the pandemic. But consumers should not expect similar levels of empty store shelves or a run on toilet paper, Miller said.
“Rather than empty shelves, there’s going to be a lot less choice in certain product categories,” he said.
‘Can’t justify the risk of a full catalog’
For new moms, tariffs mean Sarah Wells’ best-selling version of her breast pump backpacks will only be sold in black or one other color, such as brown or gray, once she runs out of inventory.
“We can’t offer four other colors right now,” said Wells, the founder of an eponymous brand of backpacks, totes and other breast-feeding products.
Wells halted ordering products from China last month because of the 145% tariffs. She found a manufacturer in Cambodia, but intentionally limited her first inventory order to bags with the highest demand and profit margins.
“We can’t justify the risk of a full catalog reorder,” she said.
Wells expects to be sold out of some of her top sellers by July. Some items may not return until next year, if ever.
On the website for Ash, an upscale women’s shoe brand, boots are completely gone and only a few ballet flats are left on sale.
“I’ve never seen our page look like this,” said Marina Rosin Levine, the CEO of Highline United, which owns Ash and Isaac Mizrahi and produces private-label footwear.
Ash pulled boots off the site to hold them for the fall, unsure if there will be enough inventory during the season, she said. It also cut product orders from China and narrowed its orders from its manufacturers in Vietnam.
“Right now, a woman like myself would be excited to get fall boots on discount,” Rosin Levine said. “This would be a great time to pick up a deal. You’re going to see less and less of that.”
Big brands cutting variety
Big-name brands are also paring down.
Hasbro, the owner of Nerf, Play-Doh and other toys and games, is cutting some items that won’t be profitable with 145% tariffs on China, Hasbro finance chief Gina Goetter said on an earnings call in April.
Roughly 80% of toys sold in the United States are made in China, according to the Toy Association, an industry group.
In US stores, Hasbro plans to favor older, “tried and true” toys produced in India over products from China. The Chinese-produced toys include items with electronics, high-end decorations and foam materials, the company said.
Newell Brands, the maker of Graco, Baby Jogger and other consumer goods’ brands, will also reduce the variety of baby gear it sells because of tariffs on China. Around 97% of baby strollers and 87% of children’s car seats in the United States are sourced from China, the company said.
“We have encouraged our business leaders and brand managers to embrace another round” of product cuts, Newell CEO Christopher Peterson said on an earnings call last week. The company in recent years has cut its product variety from 100,000 items to under 20,000 to slash costs and eliminate duplicative products.
Discount retailers Dollar Tree and Five Below, clothing brand Vince and Acco Brands — the maker of Mead, Five Star notebooks and Swigline staplers — have also signaled they will discontinue some items because of tariffs.
“There will definitely be a little bit of (product) reduction,” Vince finance chief Yuji Okumura said on a call with analysts last week. “There are just some things that won’t make sense” to import at such high tariff levels.
Stunting creativity
The tariff fallout won’t just limit consumers’ choice — it will also stunt innovation and create winners and losers in the retail industry, companies and trade researchers say.
Tariffs mark the end of the corporate strategy to offer all things to all customers, said Shawn Nelson, the CEO of furniture retailer Lovesac. The companies in best position to succeed in this new era of protectionism will be more specialized and have slimmer product catalogs.
“The broader a company’s assortment and catalog is, the more at risk they are to cancel product lines,” Nelson said.
Consumers may see fewer new products come along, if they come at all.
“We’ve been wanting to make other creative small appliances, and at this moment we’re going to be shelving those ideas,” said Bobby Djavaheri, the president of Yedi Houseware, a kitchen and small appliances’ company, told CNN.
Sarah Wells has also stopped creating new designs of bags and styles, a retreat from her business mission.
“That was a big part of what I founded my business on — giving moms choices about the bags and where to take them,” she said. “There’s nothing new in the hopper right now.”