Uncertainty brought by U.S. President Donald Trump‘s threats of tariffs and his shape-shifting trade policies are starting to have a chilling effect across many industries, businesses warn, as consumers pull back on everything from basic goods to travel.
Reuters
Trump’s back-and-forth tariff moves against major trading partners have kept businesses, consumers and companies on edge, prompting companies to warn they may have to raise prices, which could boost inflation and dent economic growth.
While Trump has said his policies could cause short-term pain, concerns about their economic fall-out intensified over the weekend after he declined to predict whether his economic policies would cause a recession.
On Monday, such fears fuelled a stock market sell-off that wiped nearly $5 trillion from the S&P 500’s peak last month, when Wall Street was cheering much of Trump’s agenda.
Speaking after the market close on Monday, Delta Air Lines CEO warned that economic worries among consumers and businesses were already hurting domestic travel.
“We saw companies start to pull back. Corporate spending started to stall,” CEO Ed Bastian told CNBC on Monday. “Consumers in a discretionary business do not like uncertainty.”
Cuts by Americans to discretionary spending knocked airline stocks on Tuesday and with each day, evidence is mounting across the corporate world that the chaotic implementation of Trump’s tariffs is translating into caution on Main Street.
Trump is expected to speak with around 100 CEOs at a regular meeting of the Business Roundtable in Washington, an influential group that includes bosses of major U.S. companies from Apple to JPMorgan Chase and Walmart. The Republican president met with technology company executives at the White House on Monday.
The latest round of Trump tariffs – 25% levies on imported steel and aluminium – kick in on Wednesday.
The tariffs will apply to millions of tons of steel and aluminium imports from Canada, Brazil, Mexico, South Korea and other countries that had been entering the U.S. duty free under the carve-outs.
Trump has vowed the tariffs will be applied “without exceptions or exemptions” in a move he hopes will aid the struggling U.S. industries.
On Tuesday, he said he was doubling the planned tariff on all steel and aluminium imports from Canada, bringing the total to 50%, in response to the province of Ontario imposing a 25% surcharge on electricity it exports to the United States.
In a post on Truth Social, Trump also threatened to “substantially increase” tariffs on cars coming into the United States on April 2 “if other egregious, long time Tariffs are not likewise dropped by Canada.”
Ahead of these measures, a range of recent surveys of U.S. businesses and consumers have shown deteriorating sentiment, which, if sustained, could hamper investment and household spending. The National Federation of Independent Business – a Washington lobby group whose members staunchly supported Trump in the 2024 election – reported small business sentiment weakened for a third straight month, erasing the bump from Trump’s election victory.
“Uncertainty is high and rising on Main Street, and for many reasons,” said NFIB Chief Economist Bill Dunkelberg, without elaborating.
That followed Monday’s monthly New York Fed survey of consumer expectations showing households were growing more pessimistic about their financial prospects in the year ahead and a higher share of respondents expecting a rise in unemployment.
U.S. businesses broadly had greeted Trump’s election with optimism, fuelled by pledges of deregulation and tax cuts.
But Republicans in Congress have yet to agree on a plan that would allow them to cut taxes and instead are focused this week on averting a government shutdown when funding expires at midnight on Friday.
Companies sensitive to shifts in consumer and business sentiment are sounding the alarm about slowing demand for household and industrial goods.
Germany’s Henkel, which makes Sellotape and Schwarzkopf hair products, said on Tuesday that Washington’s policies were hurting the U.S. market disproportionately.
The company which also makes adhesives, currently sees a “reluctance” in terms of demand in the U.S. for both consumer and industrial segments, CEO Carsten Knobel told reporters.
It was too early to quantify a possible impact on its business as the situation remains volatile, he said.
Kohl’s Corp forecast profits below Wall Street estimates, as the U.S. department store chain grapples with uneven demand.
Larger rivals Macy’s and big-box retailers Walmart and Target have also tempered expectations as U.S. inflation risks rise and recession fears mount.
Telecom firm Verizon Communications’ shares fell after it said first-quarter growth will probably be “soft”.
Christian Schulz, deputy chief European economist at Citi, said growing fears about a U.S. recession will make life even harder for companies.
“Companies will have a tougher time in the short term to make investment decisions for the long term,” he said.
UK consumers are adjusting their shopping behaviour in response to the tough economic backdrop, according to the third annual Shopper Preference Report from Bazaarvoice.
Asos
The provider of UGC and social commerce solutions speaks to over 8,000 global consumers every year with a big chunk of them in the UK. And it found that inflation has had a big impact on their behaviour with “affordability and trust driving purchasing decisions”.
And while there has been a lot of talk about fashion spending being affected, the study claims that the hardest hit categories are actually grocery (71%), food and beverages (60%), and health & beauty (25%).
Bazaarvoice said 58% of UK consumers have switched to cheaper brands, 45% are delaying non-essential purchases, and 36% are actively using coupons and discount codes. Loyalty programmes are also seeing increased participation, with 35% of shoppers joining them to access better deals.
Store brands are gaining traction amid economic pressure. The survey also reveals that 57% of UK consumers have permanently switched to store-brand products. Lower prices (77%) remain the biggest factor, but improved quality (48%) and positive reviews (35%) are also helping store brands earn consumer loyalty.
As for Authenticity, 57% of UK shoppers cite real customer reviews as the biggest factor in their final purchase decisions. “Consumers trust content that includes detailed product descriptions (33%), real-life photos/videos (37%), and balanced feedback (36%)”, we’re told. However, on the flip side, they’re “wary of overly positive, generic reviews (45%) and suspiciously high review volumes in a short time (40%)”.
The report also said that social media continues to become ever nor important to shopping decisions. A third (32%) of UK consumers say social media introduced them to new products, while 28% use it to compare prices and products.
Short-form videos (49%) and customer reviews (44%) are the most trusted content formats here. However, “honesty remains paramount” as 51% of UK shoppers distrust creator content that feels overly promotional, and 42% say authenticity comes from creators who acknowledge a product’s pros and cons.
Social media’s prominence shows how tech can make an impact and consumers appear to be hungry for even more innovation. A quarter (26%) of UK shoppers are excited by smart fitting rooms, and 19% find augmented reality product visualisation appealing.
Paul Smith and Lee have released the capsule collection that was first shown at the Paul Smith SS25 presentation at Pitti Uomo. The British designer and the American brand have collaborated on a collection inspired by Paul Smith’s famous stripes and Sir Paul’s saying, “look and see”.
Paul Smith x Lee
The 14-piece limited edition includes jeans, denim jackets, western-style shirts and T-shirts.
The companies said their connection goes back many years with Paul Smith’s first shop in Nottingham having been a location to sell his own designs and to present his customer base with his favourite items from other makers.
We’re told that “one such item was a particularly excellent pair of painter’s trousers, which he began importing in the early 1970s, from a specialist denim brand based in the United States. That brand was Lee – a name familiar to anyone with even a passing interest in denim, workwear, or Americana”.
Now, in a “full circle moment, the capsule reframes the Lee 101 jean and 101 Stormrider jacket, Lee chore jacket, western shirt and carpenter pant in exclusive prints and patterns”.
A washed jacquard set featuring Smith’s tapered trouser, and playful graphic tees and hoodies complete the new collection.
Co-branded trim details give hints of colour while a signature version of the Paul Smith stripe is interspersed throughout.
The collection’s “playfulness” is represented in the official campaign imagery. Shot by Anton Gottlob, it features six “friends of Paul Smith” styled to highlight each talent’s personality. Featuring two musicians, a painter, a dancer, a stylist and a lawyer (Emil Sands, Deneille Robert Percival, Suren Seneviratne, Eddie Wailes, Henry Prior and Hak Baker), “the collection fits each subject and their lifestyle in a unique way”.
Prices range from £85-£450/$90-$450 on paulsmith.com and lee.com and in selected partner-owned stores worldwide. It’s also available in select retailers globally with Nordstrom as the exclusive US wholesaler.
“I used to sell Lee in my Nottingham shop in the 1970s and they were important to me when I was first starting out. Getting clothes over to the UK from the USA was much more difficult to do back then and it was always so exciting to have it in the shop. They’ve got real heritage and being able to partner on this collection has been great. Pairing their expertise in denim and our knowledge of print and design is a brilliant combination,” Sir Paul Smith said.
And Jenni Broyles, executive VP & global brands president at Lee, added: “Paul Smith is renowned for its ‘classic with a twist’ aesthetic which fits authentically with Lee’s timeless style.”
Carine Roitfeld and her son Vladimir Restoin Roitfeld have unveiled Players, a new sports and media venture that launches for SS25 with Restoin Roitfeld as editor-in-chief and NBA star Dwyane Wade as its first guest editor. Carine Roitfeld is co-founder and head of fashion.
The fashion and multimedia brand is fronted by a bi-annual “collectors magazine” and will expand into “custom publishing, limited edition capsule collections and exclusive collaborations with top athletes and designers”, we’re told.
The duo said that Wade’s role in the inaugural issue sets the tone for Players’ “unique blend of high fashion storytelling, cultural influence and immersive brand experiences”.
Restoin Roitfeld added: “we are building something beyond the magazine – an intersection of fashion, culture and sport that speaks to a new generation of readers and collaborators.
“This venture will open doors for a new wave of creatives – writers, stylist photographers and designers – who have never worked with the CR team before, bringing fresh perspectives and storytelling to players. It will also really find how brands are featured, placing them in unexpected factors and collaborations that feel disruptive, modern and culturally irrelevant”.
They believe that the “fusion of sports and high fashion has never been more topical. Social media has transformed athletes into the new style stars of today”.
As mentioned, it will be more than a magazine and beyond editorial storytelling will foster a global network of creatives athletes and fashion insiders with the aforementioned custom publishing and product drops elements also key to creating a durable brand.
Entertainment8 years ago