The tariffs imposed by the United States are fully passed on to consumers! Retail giants collectively warn of a new wave of price increases.

Notice that American consumers are facing a new round of price pressures, with major companies from food giants to hardware chains warning that the cost of tariffs has started to be passed on to retail end customers. Retailers such as Walmart Inc. (WMT.US), Target Corporation (TGT.US), and Best Buy Co., Inc. (BBY.US) have all indicated in recent weeks that some tariff-related price increases are gradually being reflected in the costs of groceries, home goods, and electronics. Last week, J.M. Smucker (SJM.US), which owns brands such as Folgers, Dunkin' Donuts, and Caf Bustelo, warned that it would further increase prices after tariffs led to a 22% drop in profits for US coffee. Hormel Foods Corporation (HRL.US), which owns brands such as Spam and Skippy peanut butter, mentioned a "sharp increase in commodity input costs" after quarterly performance fell short of expectations. This warning caused its stock price to fall by 12%. Adding to the uncertainty, a federal appeals court ruled on Friday evening that most of President Trump's global import tariffs are unconstitutional, stating that the executive order exceeded its statutory authority. The 7-4 decision allows tariffs to remain in effect while the government appeals to the Supreme Court, leaving retailers and consumers uncertain about future import costs. "The situation has gone beyond manageable," said Mickey Drexler, former CEO of Gap (GAP.US) and current chairman of fashion brand Alex Mill, before the latest tariff developments. "Companies cannot determine the relationship between product costs, retail prices, and profit margins... I believe the worst stage is yet to come." Executives warn that as new inventory purchased at higher costs arrives, more price increases are expected. Walmart Inc. CEO stated last week, "We are extending the time to maintain low prices as much as possible," "As we replenish inventory at post-tax price levels, we continue to see costs rise weekly and expect this situation to continue into the third and fourth quarters." The escalating pressure is forcing retailers of all kinds to weigh their own tolerable cost proportions and how much will inevitably be passed on to increasingly differentiated consumers. "This is a typical K-shaped economy," said Tom Essaye, founder of Sevens Report Research, last Friday, "high-income groups continue to support the economy while low-income groups are under dual pressure from tariffs and inflation." A consumer confidence survey released on Friday by the University of Michigan showed a nearly 6% drop in the August confidence index from July, with a decrease of over 14% compared to the same period last year. Expectations for inflation in the next year increased from 4.5% to 4.8%, and the index for durable goods purchasing conditions hit a one-year low. Joanne Hsu, the survey director, noted that "confidence has generally deteriorated among all age, income, and stock wealth groups", highlighting widespread price anxiety. This cautious mindset is reshaping American consumer behavior, with households of all income levels becoming increasingly choosy about where and how they spend. Whirlpool (WHR.US) CEO Mark Bitzer noted that consumers are "starting to mix in low-end products", while Procter & Gamble Company (PG.US) CEO Jon Moeller observed "slight downward consumption shifts within the brand portfolio", with consumers more inclined to choose budget laundry detergent brands like Gain. Brett Rose, CEO of the United National Consumer Supplier Company, defined this behavior as "alternative consumption" rather than simply downgrading: "Consumers are no longer buying Zumamlon candles, but will choose alternative products that still offer excellent value for money. At stores like TJX, Ross Stores, Inc., or Marshall's discount stores, they can still buy brand names at lower prices." The company's cooperative partners include resellers such as Walmart Inc., Macy's, Inc. (M.US), TJX (TJX.US), Dollar Tree, Inc. (DLTR.US), and Amazon.com, Inc. (AMZN.US).