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Retailer Groups Urge Tariff Negotiations as Administration Signals Possible Updates

The National Retail Federation and Retail Industry Leaders Association push President Trump to rethink the levies against major trade partners.
Melissa Kress
the word tariff on a computer keyboard

NATIONAL REPORT — Tariffs against major trade partners went into effect this week; however, there may be some wiggle room on the exact levy amount. 

President Donald Trump's administration officially placed 25% tariffs on Canada and Mexico, and 20% tariffs on China on March 3 causing concerns among the business community — evident in the stock market's closing numbers — and consumers, and sparking Canada to implement retaliatory tariffs against the United States.

However, U.S. Secretary of Commerce Howard Lutnick said in an interview with Bloomberg Television that the administration may be easing up the tariffs and that Trump was expected to update his tariff plan Wednesday, March 5, reported The Associated Press

Wednesday afternoon, the administration announced a one month exemption for U.S. automakers from new tariffs on imports from Canada and Mexico, and reports indicate Trump is open to additional exemptions. No further updates were available at the time this article was published. 

[Read more: Five Retail Strategies to Navigate Impact of Tariff Talks]

That could be good news to retailer groups, which have been pushing the Trump Administration to work with the country's trade partners.

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"The decision to impose tariffs on our North American neighbors and two of our largest trading partners is a significant measure. Unfortunately, it is one that will only hurt hardworking Americans and the businesses that strive to provide customers with the products they want and need on a daily basis," David French, National Retail Federation (NRF) executive vice president of government relations said on March 3. 

"Tariffs are just one tool at the administration's disposal to achieve a secure border, and we urge it to explore other options to accomplish the same goals. As long as these tariffs are in place, Americans will be forced to pay higher prices on household goods," French added. "We urge the Trump Administration and our Canadian and Mexican counterparts to work together to quickly resolve our outstanding border security issues."

The Retail Industry Leaders Association (RILA) issued a similar statement. 

"The American people are counting on President Trump to bring down costs and grow the U.S. economy. Tariffs on Canada and Mexico put those goals in serious jeopardy and risk destabilizing the North American economy. Stacking tariffs on household goods will also raise costs on American families, millions of whom have struggled through the worst bout of inflation in 40 years," said Michael Hanson, RILA's senior executive vice president, public affairs.

"We urge the president and his team to re-consider compounding tariffs, including on our closest allies and trading partners, and focus on an agenda that protects family budgets and promotes growth," Hanson continued. 

Uncertainty & The Economy

The tariffs came the same day NRF reported 2024's strong economic performance was expected to carry over into 2025 and influence growth this year. However, uncertainty clouds the picture as the White House and Congress make decisions that will impact the economy.

"While the U.S. economy has entered 2025 with a fair amount of momentum, the mix of policies being debated on immigration, tariffs, deregulation and taxes blur the economic outlook and its narrative, with many crosscurrents at work," said NRF Chief Economist Jack Kleinhenz. "While deregulation and tax cuts could provide positive momentum, immigration restrictions and tariffs could be a drag on the economy and have adverse effects. Although recent economic data remains strong, we are concerned about the downside risks.

"Weak consumer perceptions and uncertainty from the lack of clarity regarding future government policies and regulations can significantly hinder business operations," Kleinhenz added. "That, in turn, can cause a hesitation in consumer spending and make it difficult for companies to make investment and hiring decisions. We are watching carefully and hoping for the best as much depends on how and when these policies are put in place."

Kleinhenz's comments came in the March edition of NRF's Monthly Economic Review, which said gross domestic product adjusted for inflation grew 2.8% in 2024, with "robust" consumer spending "fueling economic activity and making a consistent contribution to growth." Overall consumer spending unadjusted for inflation was also up 2.8% year over year in 2024 and retail sales — excluding automobile dealers, gasoline stations and restaurants to focus on core retail — were up 3.6% unadjusted.

Consumers "remained engaged" in January, with core retail sales slipping 0.9% from December after a vigorous holiday season but rising 4.2% year over year, showing that "consumer fundamentals in early 2025 are still strong and are not showing significant indications of stress," NRF reported. 

Inflation increased more sharply than anticipated in January, with the Consumer Price Index up 3% year over year compared with 2.9% in December, and producer prices up 3.5%. As inflation has been rising since last October, Kleinhenz said "the critical question is whether the trend will continue. Given the hot January inflation readings for consumer and producer prices alike, the Federal Reserve is unlikely to cut interest rates anytime soon."

Consumers surveyed for the University of Michigan's Index of Consumer Sentiment in February said they expect inflation to rise (4.3% this year, up from 3.3% expected in January). That's the highest inflation expectation since November 2023 and "likely reflected a concern about tariff-induced prices increases," Kleinhenz noted. 

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