Retailers map out tariff strategies

Flowers for Dreams is a Chicago-based flower business. CEO Steven Dyme has been bracing for changes to the tariff situation.

“We’re starting to work on our winter menu, our Valentine’s preparation,” Dyme said. “We know we’re going to be hit hard with tighter margins and some pricing pressure then. We’re preparing for that, cause it happened last year.”

He actually prefers to get his flowers from the Midwest, but not everything grows there, so he’s got to do some importing. Dyme said he’s trying to place those orders early. But that’s not really how flowers work.

“Every person up and down the supply chain reserves that right to make changes due to the delicate nature, the fragile nature of flowers,” he said.

So, prices are up, and so are substitutions. And people ordering flowers for their weddings don’t love that.

“No client loves that,” Dyme said.

On Thursday, the White House announced new 25% tariffs on Brazil, and retailers are bracing for a whole other set of tariffs on 60 countries for allegedly not doing enough to fight forced labor. Those may come later this month or next.

A lot of businesses have tried, like they did last year, to frontload their imports ahead of new batches of tariffs. The National Retail Federation estimates port volumes surged 19% year over year in June.

“You’re seeing higher freight rates as a result of some of this,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation. “You’ve got higher costs for inventory because you’re going to hold the inventory longer than you typically would.”

Nate Axvig is the CEO of Aktiv Style, a company that sells Scandinavian active wear. He orders early when he can, but that also means paying for everything early.

“You’re out money, and a good chunk of it, before you even get the product on your website or on the sales floor,” he said. Axvig has had to take out loans.

Some businesses are armed with know-how from last year’s tariffs — how to navigate and litigate the technicalities of tariff rules. Or, they have sophisticated pricing plans: raise prices on one good to pay for the tariffs on the other.

But more than anything, per Randall Sargent, partner at Oliver Wyman, they’re just over it.

“There’s so much uncertainty around it, and then it’s like the war gaming, and I think a lot of retailers that I talk to are kind of like, ‘Are we really doing this again?’”

The answer? Yes. Yes, we are.