The effects of Trump's tariffs are becoming evident as prices of department store goods in the United States rise across the board

As President Trump pushes for a new round of tariff policies, its impact on the overall price system of the U.S. economy is intensifying.

According to the latest data released by e-commerce analytics firm DataWeave, starting from May 2025, major U.S. department stores such as Macy's (M.US), Nordstrom, and Dillard's (DDS.US) are showing a significant upward trend in prices for categories like footwear, apparel, and bags. This wave of "tagged inflation" is gradually coming to light.

DataWeave tracked the price changes of nearly 15,000 stock-keeping units (SKUs) since the beginning of this year and noted that footwear products reacted the most swiftly, with an increase of about 4%. Specifically, the average price of 1,589 footwear items at Macy's rose by 4.2%, Nordstrom's increase was 3.1%, and Dillard's saw a rise of 2%. The apparel category experienced a relatively moderate increase, with Dillard's up by 2%, Macy's by 1.9%, and Nordstrom by about 1.8%. In the bag category, outdoor retailer REI had the highest increase at 2.6%, while the price hikes at the three major department stores were relatively limited.

The pace of price increases is closely related to the type of goods and the structure of the supply chain. Karthik Bettadapura, co-founder and CEO of DataWeave, pointed out that footwear largely relies on manufacturing in China, and the tariff base is already high, so even a modest additional tariff will quickly reflect in the final selling price. In contrast, private label apparel often undergoes short-cycle updates, and some products are already reflecting higher procurement costs. Apparel, due to longer design cycles and more dispersed supply sources, shows a slightly delayed price response.

This trend has also been confirmed by industry associations. A recent survey by the Footwear Distributors and Retailers of America (FDRA) showed that more than half of the responding companies expect retail prices to rise by 6% to 10% in 2025 due to increased tariffs. Stephen Lamar, president of the American Apparel and Footwear Association (AAFA), stated that with back-to-school items generally facing new tariffs of 10% to 30%, a comprehensive price increase has long been anticipated. He warned that if these tariffs continue or even increase after July 9, consumer goods prices will continue to rise in the coming quarters.

Adding to the concerns, the Trump administration announced this week a trade agreement with Vietnam, which will impose a 20% tariff on Vietnamese goods and up to a 40% tariff on "transshipped" goods (originating from China and processed in Vietnam). This agreement poses a heavy blow to brands like Nike (NKE.US), Lululemon (LULU.US), Patagonia, Puma, and H&M, which heavily rely on manufacturing in Vietnam.

According to AAFA data, Vietnam is already the second-largest source of footwear and apparel imports for the U.S. In 2024, the U.S. imported 274 million pairs of shoes from Vietnam, accounting for over half of total sneaker imports, and it is expected that Vietnam will surpass China in 2025 to become the largest international footwear supplier. Although the new agreement's tariffs are lower than the 46% previously threatened by Trump, considering the current 10% most-favored-nation rate already imposed on Vietnam, the overall import costs will significantly rise FDRA President Matt Priest expressed strong opposition, stating that the agreement is "unnecessary and bad economic policy," and warned that "disrupting this supply chain will only hurt American consumers and the entire industry."

At the retail end, the pressure of rising prices for goods has gradually been passed on to consumers. Jonathan Gold, Vice President of the National Retail Federation, pointed out that although many businesses are trying to mitigate the impact through advance purchasing and inventory adjustments, goods affected by tariffs are entering retail shelves, and price increases are becoming unavoidable. He stated that with the arrival of a new round of back-to-school replenishment, he will closely monitor whether this trend accelerates.

Former Walmart (WMT.US) CEO Bill Simon noted that whether an inflation trend ultimately forms depends on consumer choices. "Businesses have absorbed some costs internally as much as possible, and the remaining costs can only be passed on. Consumers are the final arbiters; they will decide whether they are willing to pay for higher-priced goods or switch to other non-tariff items." He gave an example that if bananas rise in price due to tariffs, consumers might turn to oranges produced in California or Florida, and ultimately, the overall price of that category may not necessarily increase.

Peter Boockvar, Chief Investment Officer of Bleakley Financial Group, pointed out that core import prices have risen in April and May, and the inflation chain has already been activated. "The question is how this wave of cost pressure is transmitted along the supply chain and who ultimately bears it." He stated that Federal Reserve Chairman Powell is choosing to wait and see, waiting for the full impact of tariffs to be transmitted to terminal data before deciding whether to adjust monetary policy