From Walmart to Etsy, here are the potential winners and losers of Trump’s tariffs
This earnings season revealed that retailers are split on what Trump’s sweeping tariffs on a range of foreign imports could mean for their bottom lines.
Big-box chains are sounding the alarm, warning that higher import costs could squeeze margins and force price hikes on consumers. But for others — including off-price retailers, e-commerce sites and secondhand apparel companies — tariffs could create unexpected opportunities, weakening competitors reliant on ultra-cheap Chinese goods. As Trump’s trade war heats up, the retail industry is bracing for a new economic divide: those that will benefit and those that will bear the cost.
Trump has already slapped a 10% tariff on imports from China, the world’s largest exporter, and he’s threatened to impose an additional 10% duty on Chinese goods. The U.S. is poised to levy 25% tariffs on goods from Mexico and Canada as early as Tuesday after a 30-day grace period. The Trump administration has also said it plans to implement a 25% tariff on imports from the European Union, as well as new or higher duties on steel and aluminum goods.
To get a better sense of how tariffs could impact the retail industry, Modern Retail rounded up comments from recent earnings calls and interviews with retail executives, who spoke about how they think tariffs could impact their respective companies.
It’s worth noting that the retail industry is still waiting to see how long these tariffs will actually last and how big of a role they will play longterm in impacting consumer sentiment. But, the comments are divided based on which companies are already warning that this year will be more challenging due to tariffs, which companies think they could be a net beneficiary of tariffs (at least in the short-term) and which companies aren’t yet baking tariffs into their full-year guidance.
Companies that are sounding the alarm on tariffs
Skechers: Footwear is one of the sectors that is most susceptible to tariffs. According to the American Apparel and Footwear Association, as of 2020, roughly 98% of footwear was manufactured overseas. In turn, the sneaker company Skechers said that Trump’s unpredictable trade policies were becoming a wildcard in the company’s forward guidance.
“The recently announced incremental U.S. tariffs on goods from China has impacted our visibility,” the company’s CEO, John Vandemore, said on an earnings call with analysts in February. “And while we have not yet fully factored their potential impact and our response into the following guidance, it will likely comprise a combination of actions, including the reallocation of certain production, vendor concessions and pricing.”
Bath & Body Works: Despite strong fourth-quarter results, Bath & Body Works forecasted lower-than-expected full-year earnings guidance when the company reported earnings last week. Bath & Body Works said its guidance “reflects the impact of recently enacted tariffs on goods imported from China and excludes potential impacts from other possible tariff changes.” The majority of Bath & Body Works products are made in the U.S. at the company’s production hub in New Albany, Ohio, but 10% of the company’s supply comes from China, Eva Boratto, the company’s CFO, told analysts on an earnings call. Meanwhile, Canada and Mexico represent about 7% of the company’s supply combined.
Companies that might see positive knock-on effects from tariffs
While Trump’s tariffs stand to pinch some retailers, others are hopeful that consumers, squeezed by higher costs, will turn to them for shopping.
ThredUp: On Feb. 24, secondhand apparel marketplace ThredUp released a preview of its 2025 Resale Report, including new data on how customers and retailers feel about tariffs. Around half of customers surveyed said they expect tariffs to make apparel more expensive and that they would look for more affordable options like secondhand. Meanwhile, 80% of retailers said they expect the tariffs to disrupt their supply chain this year, and 54% said they see resale as a more stable source of inventory.
Alon Rotem, ThredUp’s chief strategy officer and general counsel, told Modern Retail in an interview that rising tariffs, like inflation, weaken consumer purchasing power, making resale more attractive. That dynamic creates an opportunity for resale companies to pull price-conscious shoppers away from fast-fashion players like Temu and Shein, both of which face significant exposure to China tariffs.
“Given the specter of tariffs, that makes resale and secondhand a more attractive option for those customers who are in the market for apparel,” Rotem said.
Indeed, U.S. consumer sentiment in February plunged to a 15-month low over tariff fears.
ThredUp’s revenue in the fourth quarter rose 9% year over year to $67.3 million, while the company earned $260 million in 2024, up by 1% from 2023. The company’s path to profitability has been a rocky one. ThredUp has achieved profitability in some quarters, including the third and fourth quarters of 2023. However, the company has also reported losses in other quarters, including the second quarter of 2024.
Etsy: The e-commerce platform — known for handmade and vintage goods from small businesses — has also said tariffs on China goods could be good for business. The company has previously blamed China-founded e-tailers like Temu and Shein for hammering its business.
“Etsy has much less dependence on products coming in from China,” Etsy CEO Josh Silverman told analysts on an earnings call in February. “To the extent that we see tariffs that are very focused on China, … at least in the near-term, Etsy is a net beneficiary from that.”
TJX Companies: The parent of T.J. Maxx and HomeGoods told analysts last week that inventory from China only comprises a small percentage of the company’s business. As such, John Klinger, TJX’s CFO, said he didn’t expect tariffs to hurt it in the long run.
“Our fiscal 2026 guidance assumes a small negative impact in the first half of the year from the current China tariffs on merchandise that we were committed to when these tariffs went into place,” Klinger said. “We have seen tariffs before, and we are confident we can navigate our way through the current China tariff environment on our future buys.”
In November, TJX’s CEO Ernie Herrman said tariffs may create advantageous buying situations for the company, saying, “When there’s chaos in the market, … that’s an opportunity for us.”
For many companies, it’s too soon to tell
Meanwhile, the biggest brick-and-mortar retailer has not baked the impact of tariffs into its full-year guidance, an indicator that many retailers are still taking a wait-and-see approach.
Walmart beat earnings and revenue estimates for its fiscal fourth quarter, but said its profit growth will slow in the current fiscal year. On an earnings call with analysts, Walmart’s CFO John David Rainey said the company doesn’t have “any explicit assumption in our guidance around tariffs,” meaning Walmart’s growth this year could slow even more depending on the severity of Trump’s trade policies.
Still, Walmart said it was prepared to weather Trump’s trade war.
“We have to acknowledge that we are in an uncertain time, and we don’t want to get out over our skis here,” Rainey said. “We feel good about our ability to navigate the environment, whether it’s tariffs or other macro uncertainty.”