With President-elect Trump set to retake his seat in the Oval Office in January, he’s well underway laying the groundwork for what his administration will look like and what priorities he and his team will tackle right out the gate. Near the top of that list is the promised implementation of tariffs on imports.

In a post on his own Truth Social platform, Trump wrote that on Day One, he will “sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States.” That’s in addition to the 10 percent tariff he said he’d impose on all goods coming into the U.S. from China.

According to Trump’s posts, the policy decision is aimed at those countries in particular in because of the “massive amounts of drugs, in particular Fentanyl, being sent into the United States,” in addition to the open border policy that he says has allowed thousands of people to pour into the country through the northern and southern borders. The president-elect stated that the tariffs will remain in effect “until such a time as they stop.”

In reviewing Trump’s proposed tariffs – which, during the campaign, were said to be between a 10-20 percent universal import and an additional 60-100 percent tariff on imports specifically from China – the National Retail Federation found that the American consumer would lose some $46 to $78 billion in spending power each year.

“Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices,” NRF Vice President of Supply Chain and Customs Policy Jonathan Gold said in a statement earlier this month. “A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers’ pockets through higher prices.”

The tariffs mentioned this week could have an immediate impact on the cost of goods from several big-name brands including Samsung and LG – both of which maintain TV and home appliance manufacturing plants in Mexico. NRF’s study showed that consumers could pay around $8.5 billion to $13.1 billion more for furniture each year and $6.4 billion to $10.9 billion more for household appliances.

Trump Tariffs, Take Two

All of the studies and predictive analysis around the proposed tariffs are fine to look at. But we have a bit of recent history that we can actually look to in order to get a better understanding of how these tariffs might play out. Back in 2018, then-President Trump implemented broad sweeping tariffs on, mainly, China. That round of tit-for-tat trade escalation saw 25 percent tariffs put in place on washing machines, solar panels, steel and aluminum, TVs, and many other Chinese-made goods.

Many of those tariffs have remained in place through the Biden administration, and a recent review of duties collected through the U.S. Customs and Border Protection agency show that Americans have paid more than $230 billion to date. And though it can be hard to directly pinpoint the exact impact on the cost of specific goods impacted by tariffs, a 2020 study on washing machines found that tariffs led to an $86 increase in the median price of one.

And on the jobs front, a variety of studies found that while there were some jobs created as manufacturing moved to the U.S. because of the tariffs, there was ultimately a net decrease in employment. Federal Reserve economists blamed the loss of jobs on the fact that goods became more expensive to U.S. businesses and consumers, and the retaliatory tariffs put on American exports made other U.S. manufacturers less competitive when selling their products overseas.

What Retailers Can Expect

What’s important to remember in all of this is that the impact most certainly won’t be felt overnight. These things take time to play out. The most immediate effect retailers might see is that some businesses will start to pull forward their purchase patterns in order to mitigate potential cost increases, which could cause some hiccupping in the supply chain.

(On that supply chain note, another bit of news to keep in mind: We will see those temporary stop-gap agreements that ended the East and Gulf Coast port strikes come due. Negotiations were set to resume in November, ahead of the January 15 deadline. Wage increases were agreed upon back in early October, but automation remained a major concern for union workers.)

Aside from that, there’s no need to be hasty.

One proactive step a retailer could take is to use the possibility of higher financing costs to review their own operational efficiencies. Look for areas of cost savings. Optimize the business. Lean into some group programs that have the potential to drive dollars back to the bottom line.

If there’s another thing we learned from the first Trump administration it’s that we should wait to see what actually happens. Posts on a social media platform are great fodder for media coverage and those in the business of economic prognosticating. But let’s let this thing play out, and then decide how and when to react.