The US retailers mostly import their goods from China and Trump tariffs have mostly hit China. According to Peter Schiff, if Trump’s tariffs stay in place, there will be a wave of retail bankruptcies. 

The American stockbroker and gold evangelist said that retailers will be forced to close down. If not, they will have to downsize as businesses cut costs and lay off workers. 

This will not be a small hit because other industries will be affected. Peter Schiff said, “Landlords will be stuck without tenants, and banks will be stuck with empty retail space on defaulted commercial loans.”

This looks like something Trump wants. The main problem in the US economy has been the trade deficit. Economists have tried to explain the trade deficit as a good thing for the US because of its strong currency. But Trump doesn’t want to hear it. 

The collapse of the retail industry will lower the trade deficit. According to Schiff, “All the goods Americans can no longer afford to buy will no longer be imported. We win.”

The retail industry strategy

Peter Schiff has warned, “In the end, the U.S. will have far fewer retail businesses left. They will sell a lot less merchandise, but they will do so at much higher prices.” Of course, prices will rise more than the tariffs because retailers have to cover their fixed costs for lower sales volumes. 

For instance, this week’s Walmart (WMT) investor day is also being watched. This is because their comments about how they plan to deal with higher costs are important. Dollar General could be waiting to see what Walmart decides if it has planned to pass on costs to customers. Dollar General will also have more room to raise prices.

On the other hand, If Walmart wants to compete on price, that would be bad for Dollar General because it would make the competition tougher. Meanwhile, Dollar General stock has gone up almost 6% in the last five days, while the S&P 500 has gone down more than 10%.

However, a company report says that 41% to 43% of all Dollar Tree’s goods are direct imports. In addition, most of those imports come from China. Analysts have warned that stores that sell a lot of general merchandise and non-essential items will be hit harder.

Ross Stores (ROST) plans to play the off-price space and market more generally, given uncertainties around the consumer. It also wants to prioritize marketing and store experience.

Tariffs will do more damage than good – America’s businessmen

Well-known Wall Street figures continue to warn Trump on the issue of tariffs. It seems like America is fighting the World. This is overconfidence. For example, Jamie Dimon, head of JPMorgan Chase, said that Trump’s tariffs could cause prices to go up for Americans, which is already happening. 

Bill Ackman, the head of a hedge fund, told the US president to stop imposing new trade taxes or face a self-induced, economic nuclear winter. The wealthy supporter of Donald Trump urged the president to give countries three months to renegotiate their trade deals with the US while the markets are in chaos.

The country is 100% behind the president on fixing a global system of tariffs that has disadvantaged the country. But, business is a confidence game and confidence depends on trust.

President @realDonaldTrump has elevated the tariff issue to the most important geopolitical…

— Bill Ackman (@BillAckman) April 6, 2025

In addition, Ackman said that business investment will stop, and people will stop spending money. This will badly hurt America’s reputation with the rest of the world, and it could take years or even decades to fix.

CEO of Blackrock, Larry Fink, said that the tariffs will raise prices and possibly inflation and contribute to an economic downturn. He confessed, “Most CEOs I talk to would say we are probably in a recession right now.”

Simon MacAdam, deputy chief global economist at the consulting firm Capital Economics, said that businesses were not likely to spend right now because of Trump’s tariff policy’s uncertainty.

Following Trump’s announcement of his tax plans at Liberation Day last week, Goldman Sachs said that there is a 45% chance that the US will go into a recession within the year. This is up from 35%. Too many analysts and businessmen have come out to disagree with what Trump is doing. 

Rep. Ro Khanna has called Trump tariffs the most self-destructive, wealth-destroying policy for a president. According to him, the tariffs are hurting tech companies, small businesses, manufacturers, and farmers

He has said that the damage is permanent because he has hammered the confidence and trust of the business community. However, there is still a chance for Trump to say he made a mistake and bring in a new team of economic advisors to assure people that he will never do “blanket tariffs” again.

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