Impact of U.S Tariffs on the Consumer Goods Industry

In March 2025, new tariff measures were announced by the U.S. government that affect various product categories, including consumer goods imported into the country. The enforcement of high tariffs on imported products in the U.S. forced manufacturers in more than 70 countries to halt their shipments to the country. This factor will likely lead to a shortage of products such as consumer electronics, toys, and liquor across the U.S. It can also negatively impact the international sales of these manufacturers. As a result, the new tariffs will create an increasingly challenging environment for businesses worldwide.

How Tariffs Impact the Global Economy

Tariffs introduced by U.S. President Donald Trump threaten to increase the prices of products such as furniture and mobile phones in the U.S. in the near term. These changes in prices can reduce product demand and impact consumer spending habits. They can also minimize numerous manufacturers' and retailers' sales; however, the increase in product prices can also raise their profit margins. In addition, the tariff hikes will likely impede global trade and slow down global economies.

According to The Toy Association, a U.S.-based trade association, approximately 80% of the broad range of toys sold in the U.S. by multiple retailers are sourced from China. In addition, as per industry experts, approximately 20% price increases on toys are expected in the U.S. due to the new tariffs. This factor can disrupt domestic business operations and slow down overall economic growth. Moreover, tariffs on consumer goods that are not manufactured in the country at a large scale can increase costs for end-users and trigger inflation.

Impact on Global Business

China, a prominent consumer goods producer, is subject to high tariffs of over 145%. As a result, a sizable number of U.S.-based consumer goods retailers have halted or suspended their business partnerships with China-based companies. However, U.S. officials expect that the import taxes will increase the manufacturing of consumer goods in the country and open high-paying production jobs, leading to economic growth. They also anticipate that the tariffs will raise funds for the government and protect U.S.-based companies from high competition due to numerous international players.

The new tariffs have affected the business operations of numerous consumer goods companies and led them to suspend product shipments, sales, and business partnerships. For instance, in April 2025, Five Below Inc., a U.S.-based retailer of products such as household items, apparel, and toys, paused its business with China. In another instance, on 8th April 2025, Framework, a U.S.-based consumer electronics brand, announced the provisional halt of the sales of its laptop models, such as the Ryzen 5 7640U and Ultra 5 125H, in the U.S. due to tariff hikes. The company also announced that earlier, its laptops that were imported from Taiwan were priced at a 0% tariff. However, it expects that its laptops can be sold at a loss with the new 10% tariff. Furthermore, in April 2025, Basic Fun, a Florida, U.S.-based company manufacturing toys in China, halted product delivery to the U.S. due to high tariff costs. Moreover, industries such as Swiss watches that highly depend on U.S. consumers can be significantly affected by high tariff rates.

Strategies for Businesses

If these tariffs continue, companies such as Apple Inc. (a U.S.-based electronics product brand) are likely to increase the cost of their popular products, such as iPhones and smartwatches, as their sales are highly concentrated in China. Moreover, companies need to evaluate the impact of these challenging tariff environments on their revenues and market positioning. Implementing sales and pricing strategies can further assist in mitigating complexities and risks. Examining product pricing and emphasizing cost-cutting to the extent that it does affect product quality can also assist companies in avoiding losing potential customers.

Key Takeaways

The uncertainties related to future U.S. tariff structures can complicate the logistics and production planning of companies worldwide. Strengthening efficiencies, relocating production, and developing flexible price adjustment strategies can assist brands in tackling the trade disrupts. 

Furthermore, according to the new U.S tariff structure following percentage of tariffs are imposed on various consumer goods categories:

• Wool sweaters: ~169%


• Toasters: ~150%


• Plastic dishes: ~159%


• Toys, dolls, puzzles: ~145%


• Aluminum foil: ~75%


• Metal furniture: ~70%


• Laptops: ~20%