A bit of good news for retailers and other businesses: on Monday, May 12, 2025, the United States and China issued a joint statement announcing a 90-day pause on most of the reciprocal tariffs on each other.
The combined U.S. tariff rate on Chinese imports will be cut from 145% to 30%, and China’s tariff on American imports will drop from 125% to 10%. The new 30% rate is the 10% universal tariff applied to nearly all foreign imports plus a 20% duty assessed to curb China’s illegal trade of fentanyl.
The Stock Market Responded Positively
The U.S. stock market closed Monday 5/12/25 with the Dow up 2.8% (+1,161 points to 42,410), the S&P 500 up 3.3% (+184 points to 5,844), and the NASDAQ up 4.4% (+779 points to 18,708). Investors’ worries seem to be temporarily eased about the impact that tariffs would have on the economy and prices of everything from toys to shoes, from apparel to furniture.
Retail Stocks Rally
Many retail stocks jumped on Monday, with some seeing double-digit gains by closing. A few large retailers that saw their share prices jump following the trade deal news:
- Abercrombie & Fitch Co. (+6.85%)
- Amazon (+8.07%)
- American Egle Outfitters (+8.35%)
- Dick’s Sporting Goods (+11.28%)
- Dollar Tree (+4.13%)
- Five Below (+21.40%)
- Lululemon Athletica (+8.73%)
- Target (+4.85%)
- Urban Outfitters (+10.5%)
Paused Chinese Tariffs Mean More Time for Planning
Although it’s uncertain whether the huge tariffs will return come August, retailers that are heavily dependent on Chinse imports now have a little more time to prepare for the future.
This Yahoo Finance article shares insights from several retail leaders, including the president and CEO of the National Retail Federation, Matthew Shay, who said, “This temporary pause is a critical first step to provide some short-term relief for retailers and other businesses that are in the midst of ordering merchandise for the winter holiday season. And over the long term, this lays the foundation for substantial progress in achieving truly fair and balanced trade relationships with both China and our other trade partners around the world.”
And from Blake Harden, vice president for international trade at the Retail Industry Leaders Association: “President Trump’s announcement of an immediate de-escalation and 90-day pause to negotiate a long-term trade deal with China is welcome news to retailers grappling with tariff shocks and enormous disruption in supply chains ahead of seasonal and holiday ordering. We are hopeful the deal reached last week with the U.K. and today’s announcement with China will build momentum for trade deals that protect American innovation and family pocketbooks.”
Retailers: What to Do During the Temporary Tariff Reprieve
Although the long-term future is still uncertain, this temporary tariff pause allows retailers a little breathing room to plan. Whether you are greatly impacted by Chinese or other country’s tariffs or not, here are a few things your retail business should do now:
- Revisit opportunities for operational improvement. Now is the time to revisit your financials and forecasts and analyze the numbers to determine where you can find efficiencies. Use the 90-day pause as a chance to regroup and put yourself in the best possible position.
- Revisit your supply chain. Strategize how you might be able to diversify your supply chain and move some of your sourcing to domestic suppliers. Although those adjustments might take longer than this tariff timeout allows, you can still get a head start now on analyzing new supply chain modifications.
- Front load inventory for the busy periods (e.g., back to school and the holiday shopping season) if it is feasible for you to do so. Moving forward with Chinese shipments to build up inventory could allow you to prepare and maintain profitability for the second half of the year.
- Take advantage of the current leasing climate to benefit your business. Now is the time to optimize your existing brick-and-mortar retail spaces and keep your eyes out for strategic expansion opportunities. Analyze your customers to understand their current spending trends and assess your competitors. If your goal is to expand into suburban markets, use a tool like SiteSeer to determine where your best opportunities are—markets with higher availability and favorable pricing. If you’ve held off expanding into high-street urban districts, the landscape in certain markets might be worth making a quick move to those with softer demand.
Embrace Technology Tools Sooner Than Later
Proactive planning is the name of the game today, and a site selection platform like SiteSeer will help you adapt, plan, and build resilience.
SiteSeer helps retail and other chain businesses make data-driven location decisions, but it offers so much more. You can assess your market potential with white space analysis, develop a market strategy, understand your customers and their evolving behaviors, analyze your competitors, build machine learning forecast models of store performance, and much more.
Now is the time to plan for the future. Take a SiteSeer demo to see how your powerful, versatile system can help you do so!
