U.S. retailers are creating contingency plans to deal with the prospect of President-elect Donald Trump’s proposed tariffs when he returns to the White House.

Trump imposed tariffs of 60 percent on goods imported from China and 20 percent on all goods imported into the United States while he was a candidate. He could also impose a 100 percent tariff on countries that don’t use the US dollar and 2,000 percent on cars built in Mexico.

“Tariffs are the best thing ever invented,” Trump said in September in Flint, Michigan.

Tariffs, which act as a sales tax on products produced outside the borders of the countries that import those goods, can affect most US industries.

Under Trump’s plan, Americans could lose between $46 billion and $78 billion in spending power a year on products such as clothing, toys, furniture, home appliances and travel items, the National Retail Federation said. A $50 pair of sneakers can cost $59 to $64 during the fee.

Trump has said China will pay for the tariffs, not American businesses or consumers.

But the companies facing the tariffs are busy deciding whether to buy products from outside China or raise their prices. One company says it will do it later.

“If we get tariffs, we’re going to pass those tariff costs back to the consumer,” Philip Daniele, CEO of AutoZone, an auto parts chain, said on an earnings call in September.

“We’re generally going to raise prices before we know what the tariffs are going to be; we’re generally going to raise prices before that,” Daniele said.

Tiffany Smith, vice president of global trade policy for the National Foreign Trade Council (NFTC) in Washington DC, told China Daily: “New and expanded tariffs will hurt working families.”

The new tariffs could also mean “a median-income household is expected to pay $1,700 more each year in import taxes,” Mary Lovely, professor emeritus of economics at Syracuse University’s Maxwell School of Citizenship and Public Affairs and senior fellow at the Peterson Institute for International economy in Washington, told China Daily.

Trump said his policies will move manufacturing back to the United States and create more jobs, but not all companies say they can afford American facilities.

It’s “unlikely that we’ll move much back to the U.S. because it’s just not cost-effective to do,” Donald Allan Jr., president and CEO of Stanley Black & Decker, said on a recent earnings call.

In the spring, the utility maker, with revenue of $16 billion, laid out a plan to address all charges, admitting that any “price increases associated with tariffs (would) come to market.”

Helen of Troy, parent company of Osprey and Hydro Flask, will seek new markets outside of China to avoid tariffs.

Zichun Huang, a China economist at Capital Economics, a London-based research firm, wrote in a recent note that “Trump’s returns could create a short-term boost for Chinese exports as US importers ramp up purchases to get ahead of the tariffs.”

China-based e-commerce companies and others accounted for 20 percent of net new warehouse leasing in the U.S. in 2024, according to Prologis, the world’s largest industrial real estate operator.

During Trump’s first term, tariffs on more than $300 billion of Chinese-made goods opened a trade war, and the United States was hit with retaliatory tariffs.

President Joe Biden kept the original tariffs and raised charges on $18 billion of Chinese imports in September.

Steve Lamar, CEO of the American Apparel & Footwear Association, said in a statement: “Tariff policies under the new administration will certainly be a challenge and will trigger new cycles of inflation if campaign proposals are fully enacted, making it more expensive for Americans to get dressed every day .”

Trump advisers recently met with Missouri Republican Jason Smith, chairman of the US House Ways and Means Committee, to discuss how a tax package could be partially paid for by tariffs, according to Politico.

In the early days of the United States, tariffs were widely used to raise revenue for the government. But since the 1950s, tariffs have accounted for 2 percent of total federal revenue, according to the Congressional Revenue Service.

“As a trade barrier, (tariffs) can also make domestic industries less competitive and cause other countries to retaliate,” Thomas Fullerton, an American economist and economics professor at the University of Texas at El Paso, told China Daily. “When that happened in the 1930s, it caused the Great Depression to deepen and become more protracted.”

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