Retail Sales Surge Ahead of Trump’s Tariff Hikes/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. retail sales jumped 1.4% in March as consumers rushed to buy big-ticket items ahead of steep new tariffs announced by President Trump. Electronics, vehicles, and sporting goods saw sharp spikes in demand. Analysts warn that rising prices and economic uncertainty could soon slow spending.
U.S. Retail Sales Surge in March: Quick Looks
- March retail sales rose 1.4%, led by auto and electronics
- Consumers rushed purchases ahead of Trump’s upcoming tariff hikes
- Auto sales jumped 5.3%, electronics up 0.8%, restaurants up 1.8%
- Furniture and home goods dipped 0.7%, showing selective spending
- Trump tariffs include 145% on Chinese imports, 25% on autos
- Consumer confidence fell sharply as inflation fears grew
- Retailers brace for supply chain disruption and higher prices
- Walmart and Amazon take steps to ease shopper impacts
Retail Sales Surge Ahead of Trump’s Tariff Hikes
Deep Look
NEW YORK — U.S. consumers went on a shopping spree in March, driving a 1.4% rise in retail sales as they scrambled to buy cars, electronics, and other high-cost items ahead of sweeping new tariffs announced by President Donald Trump.
According to the U.S. Commerce Department, the surge marked a sharp acceleration from February’s modest 0.2% gain and helped offset a 1.2% dip in January, which was largely blamed on harsh winter weather. March’s figures suggest that shoppers were strategically buying before price increases hit, anticipating higher costs due to import duties set to impact thousands of goods.
Sales excluding autos and parts rose a more modest 0.5%, indicating the big-ticket buying spree was a primary driver.
“These are simply blow out numbers on March retail sales… the rush is on like this is one gigantic clearance sale,” said Christopher S. Rupkey, chief economist at FWDBonds LLC.
Tariff Tensions Drive Consumer Behavior
March’s retail spike comes in the wake of Trump’s escalating trade war, which has already led to increased costs on a wide range of imports. While Trump recently paused new tariffs for around 60 countries for 90 days, he kept massive 145% tariffs on Chinese goods and 25% duties on auto imports and key materials like steel and aluminum. Imports from Canada and Mexico also face up to 25% tariffs.
China retaliated with a 125% tariff on U.S. goods, sparking global supply chain disruptions and rattling market confidence.
The uncertainty has prompted businesses and consumers to move quickly. Electronics sales rose 0.8%, sporting goods climbed 2.4%, and auto and parts sales soared 5.3%. However, furniture sales fell 0.7%, showing that consumers remain selective, possibly avoiding items tied to slower decision-making or longer lead times.
Online retailers and restaurants also saw growth, with e-commerce up 0.1% and dining out up 1.8%, reflecting steady demand despite economic worries.
Confidence Drops as Inflation Worries Mount
Despite the strong March sales, analysts expect a slowdown ahead. Rising costs are expected to pass through to consumers, especially as previously ordered goods start arriving with higher import duties applied.
April’s University of Michigan consumer sentiment index plunged 11% to 50.8, the lowest level since the COVID-19 pandemic, indicating Americans are becoming increasingly anxious about inflation and potential job losses.
“We’re going to see it likely play out even more because these tariffs haven’t even washed through the system yet,” said Ryan Petersen, CEO of Flexport.
“People have no choice but to raise prices to accommodate for that.”
Petersen added that the lack of clarity on tariff policy is making it nearly impossible for businesses to plan long-term or invest in new supply chain strategies.
Big Retailers Brace for Impact
While large retailers like Walmart and Amazon may be better positioned to weather the storm, both have acknowledged the challenges ahead.
Walmart CEO Doug McMillon told investors last week that the company is doing everything possible to keep prices low despite the fluid situation.
“While in the short term, we’re not immune to the effects, we are positioned to play offense,” McMillon said.
Meanwhile, Amazon CEO Andy Jassy noted that the company has attempted to bring in goods early and negotiate with suppliers, but said that third-party sellers—a major part of Amazon’s marketplace—will likely need to raise prices to remain viable.
“Some shoppers are stocking up ahead of price increases,” Jassy told CNBC’s Andrew Sorkin. “But the data is limited, and it’s unclear how widespread that behavior is.”
Online Spending Trends and Retailer Caution
Data from Bloomreach, which monitors e-commerce activity from over 1,000 brands, shows that North American online revenue rose 0.4% during the week of March 31 compared to early March. But the week of March 24 to 31 saw a sharper 6% increase, indicating the late-month sales surge was significant.
Apparel sales online surged 44.8%, suggesting many shoppers focused on upgrading wardrobes or purchasing spring essentials ahead of expected price hikes.
Still, not all retailers are optimistic. Ashley Hetrick of BDO said many retailers are holding back on seasonal inventory orders due to volatility and are adopting a “wait and see” approach. Smaller businesses, in particular, may struggle to absorb higher costs without passing them on to shoppers.
“This is not how business works,” Petersen added. “We need more certainty before we can invest.”
Looking Ahead
As tariffs filter through the system, economists warn that this consumer spending boost may be temporary, especially if inflation continues to rise and economic confidence weakens further. The real test for retail will be whether shoppers continue to open their wallets after the price hikes take full effect.
With another tariff review and decision expected after the 90-day pause, the outlook for retailers—and consumers—remains cloudy.
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