Major retailers report quarterly earnings this week, including Macy’s, JCPenney, Walmart and Dillard’s. Equity analysts are predicting the sector will deliver weaker results overall than this time last year, when consumer spending was on the rise, driven by tax cuts and rising wages.

Now, retailers face the prospect of an economic slowdown in the U.S. and abroad. Consumer spending has moderated since the end of 2018, and more serious trouble could be ahead. President Trump has threatened to impose new tariffs — starting at 10% — on a wide range of consumer goods from China, beginning on Sept. 1. Economists predict most of the additional cost of tariffs importers could face would be passed along the supply chain to consumers. If that happens, higher prices for many discretionary goods, like apparel, furniture and consumer electronics are likely to start showing up in stores near you.

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