Tariffs Bring Windfall, U.S. Thrift Stores "Boom"

Trump's tariff policy has severely impacted traditional American retailers, while the second-hand market may become an unexpected winner.

"Second-hand sales are one of the few industries benefiting from the government's global tariff policy," said Alon Rotem, Chief Strategy Officer of the online consignment and second-hand store ThredUp. "All the items we sell come from American closets, so everything we sell is immune to tariffs."

Since Trump announced "reciprocal tariffs" on April 2, the stock prices of ThredUp and Savers Value Village—two of the largest publicly traded second-hand stores in the U.S.—have risen by 31% and 22%, respectively, while the S&P Retail Select Index has fallen by 7% during the same period.

Can the second-hand market really avoid tariffs?

According to data from the Yale Budget Lab, the tariffs already implemented by Trump are expected to increase the U.S. CPI by 2.9%, which will lead to an additional annual expenditure of $4,700 for the average household. Analysts warn that in the coming months, the costs of clothing and toys may rise significantly, as the U.S. fashion and goods industries heavily rely on imports.

In this context, second-hand businesses that can avoid tariffs are presented with significant growth opportunities, said Simeon Siegel, a retail analyst at BMO Capital Markets. The second-hand market has already gained popularity among young consumers and has "double appeal" during economic downturns, as more potential buyers begin to seek discounts.

Ken Murphy, Chief Innovation Officer of the peer-to-peer online second-hand market OfferUp, said:

If tariffs significantly impact the availability or prices of certain goods like clothing, cars, and electronics, we expect buyer activity in these categories to surge.

Adele Meyer, Executive Director of NARTS (National Association of Resale Professionals), expressed her "cautious optimism" that tariffs will boost the second-hand industry, as second-hand sales "always thrive during any economic downturn."

However, some analysts warn that even if their goods come from within the U.S., second-hand sellers may not necessarily be shielded from supply shocks. In an environment of increasing uncertainty and rising fears of unemployment, consumers may decide to reduce purchases from the outset or choose to hold onto their existing items for longer, which would leave second-hand sellers with a smaller inventory pool and potentially lower quality.

Shawn Carter, an associate professor at the Fashion Institute of Technology, said:

You have to fill these second-hand suppliers with items that people buy in regular stores. That's why the best environment for second-hand sales is also the best environment for regular sales.

According to data compiled by Capital One, the U.S. second-hand market is valued at approximately $50 billion in 2024, a 30% increase from 2023 Carden stated that the market's growth is mainly due to the reduced stigma associated with purchasing second-hand goods, especially among sustainability-conscious young people, rather than price dynamics. However, he noted that the re-emergence of inflationary pressures may expand the acceptance of second-hand clothing and attract more older and wealthier consumers into the market.

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