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🚀 Tariffs driving up US department store prices
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Tariff-driven price hikes are now hitting U.S. department stores in full force, with Macy’s, Nordstrom, and Dillard’s posting clear increases in footwear, apparel, and bags as imported goods from China and Vietnam become more expensive. DataWeave’s tracking of nearly 15,000 products reveals that footwear prices have increased by over 4% at some chains since January, with private-label items being particularly hard-hit due to faster inventory turnover. Apparel, which reacts more slowly, is also inching up. New tariffs on Vietnamese goods — a key manufacturing hub for brands such as Nike and Lululemon — are expected to drive further price increases, particularly as the back-to-school season approaches. Retailers are trying to cushion the blow, but many are passing on costs to consumers, who now play the deciding role: absorb the hike, switch products, or exit categories altogether. This selective resistance may be why broader inflation hasn’t spiked, though experts warn the full effect is still working its way through the supply chain.
President Trump announced a new trade deal with Vietnam that imposes a 20% tariff on its goods entering the U.S. and a steep 40% rate on products transshipped through Vietnam from other countries, primarily targeting Chinese goods routed to dodge existing tariffs. In exchange, the U.S. is reportedly to gain full, tariff-free access to Vietnamese markets, although details and timing remain unclear. The deal comes just days before a key deadline that would have reinstated Trump’s harsher “reciprocal” tariffs, which would have raised rates across dozens of countries. While Trump touts the agreement as a win, critics warn the move will hike costs for American importers and, eventually, consumers. Vietnam, heavily reliant on exports to the U.S., now faces fresh uncertainty, particularly in industries such as apparel and footwear, which are already experiencing rising prices. Though the stock market responded calmly, economists and retailers are bracing for a summer of increasing costs and supply chain recalibrations as Trump’s tariff regime shifts again.
In a jarring miss, the U.S. private sector shed 33,000 jobs in June, far below the expected gain of 100,000, raising fresh concerns about the true strength of the economy despite recent market optimism. According to ADP, the first monthly decline in over two years was primarily driven by job losses in professional services, healthcare, and education, with small businesses taking the brunt. While large employers continued to hire, and goods-producing industries added jobs, the service sector experienced a steep net loss of 66,000 positions. Pay growth also slowed slightly for both job switchers and stayers, adding to signs of a cooling labour market. Although ADP’s figures don’t always align with government data, the drop has economists eyeing Thursday’s nonfarm payroll report and jobless claims more closely, even as the S&P 500 remains buoyant after rebounding from tariff-fueled volatility earlier in the quarter.
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