The Abstract: Could you briefly explain how you think about supply chains and trade policy when it comes to holiday shopping?
Handfield: The announcements made by President Trump on “Liberation Day” in April 2025 created chaos in the global trade environment. The U.S. imposed tariffs on 156 countries, including Mexico, Canada, and China, America’s largest trading partners. The tariffs are causing problems for American farmers, who are being told by China and Europe that reciprocal tariffs will negatively impact them as well, which has threatened the U.S. export of soybeans. Prices of U.S. soybeans have tanked during a record crop, as demand for our soybeans goes to other markets in South America. Strategic products like ships, steel and agricultural products will also feel the brunt of the effect of these tariffs.
Essentially, the tariffs act as a new tax on consumers. Even if some countries will be able to absorb some of these tariff impacts, an inflation of 10% in tariffs on $3 trillion of imports will cause massive damage.
Many companies front-loaded and stockpiled inventory before the Christmas season, which is a peak sales time for much of the retail sector. However, consumers have already felt price increases on everything from computers and automobiles to appliances and food.
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