**Retailers Brace for Price Increases as Trump Proposes New Tariffs**

President-elect Donald Trump's proposed tariff policy may lead to increased costs for American consumers, warn retail analysts and trade groups. Companies such as Five Below, Crocs, Skechers, Amer Sports, and American Eagle Outfitters might have to either hike prices or face reduced profits due to their substantial reliance on Chinese imports.

E.l.f. Beauty’s CEO, Tarang Amin, highlighted the company's pricing flexibility in a CNBC interview, suggesting that prices could rise if the proposed tariffs, which surpass those imposed during Trump's first term, are enacted. "We do have pricing power. If we saw we needed to leverage pricing, we would," said Amin.

With Trump's decisive victory and the potential new tariff plan — which could see taxes of 10% to 20% on all imports and up to 60% to 100% on Chinese goods — questions linger about its impact on inflation and consumer prices. Matthew Shay, CEO of the National Retail Federation, called the tariff proposal "a tax on American families" that will heighten inflation, escalate prices, and result in job losses.

Earlier this week, the NRF predicted double-digit-percentage price spikes across six retail categories — apparel, footwear, furniture, household appliances, travel goods, and toys — with clothing costs potentially rising between 12.5% and 20.6%.

Neil Saunders, managing director at GlobalData, shared his concerns in a research note, citing significant repercussions for retailers likely to pass increased costs to consumers. Companies could face either substantial profit loss or price hikes, driving inflation and dampening retail growth. Saunders also noted the short-term disruption in supply chains, despite potential long-term adjustments.

Bank of America analyst Lorraine Hutchinson highlighted that Five Below, Crocs, Skechers, Amer Sports, and American Eagle Outfitters, which source over 20% of goods from China, are at higher risk. Conversely, retailers such as Bath & Body Works, sourcing 85% of products from North America, appear less vulnerable.

Deep discounters like Dollar Tree, which imports numerous items from China, face challenges with their fixed-price model. Analyst Peter Keith from Piper Sandler pointed out that Dollar Tree might need to absorb costs or alter their price point model. Yeti Holdings, while downgraded due to high China exposure, might weather the changes thanks to its high-profit margins and loyal customer base.

E.l.f. Beauty and Yeti Holdings have begun diversifying their supply chains to reduce reliance on China. By the end of 2025, Yeti aims to shift about half of its production outside China. E.l.f. Beauty has also reduced its China-based production from nearly 100% to under 80% since 2019.

Consumers could face price increases on a broad range of products, from car repairs to beer. AutoZone has already indicated potential price hikes, and other companies like Constellation Brands, Diageo, and Mondelez could follow suit. Footwear, largely produced overseas, could see significant cost increases, warned Matt Priest, CEO of the Footwear Distributors and Retailers of America.

"The rate of inflation is declining," Priest said. "It would be counterproductive to then turn around and go back to pulling one of those inflationary levers, which would be additional tariffs, at a time when the consumer's telling all of us... 'We don't want higher prices.'"