With the incoming Trump administration signaling impending tariffs, many American consumers find themselves returning to the habits of stockpiling goods once again. Like the early days of the COVID-19 pandemic, panic buying is encouraged by fears of rising prices on essentials such as food and cleaning supplies. Yet, this stockpiling is being driven by economic concerns rather than the fears of immediate shortages experienced just years prior.
President-elect Donald Trump has proposed sweeping tariff increases on imports, including 10% to 20% on most goods and as high as 60% on products sourced from China. This has led to rapid consumer behavior shifts, as individuals scramble to purchase supplies before prices potentially skyrocket once tariffs take effect.
According to CNN, Tacoma resident Herschel Wilson demonstrates this trend, stating, "I started building up a small stockpile of important goods... after Donald Trump had been named the Republican presidential nominee." Spending around $300 since August on canned goods, toilet paper, and bottled water, Wilson now plans to add $100 more to his grocery spending each month.
Wilson's fear isn't necessarily about running out of goods but rather the anticipation of the rising costs associated with tariffs. He explained, "If there are tariffs, then we’re going to have to pass the costs on to our customers," affecting their pricing strategy at their small business, Painting Panda Pottery Studio.
The influx of consumer stockpiling may seem reminiscent of the pandemic’s early days, but economic experts are warning against such behaviors. Scott Lincicome, vice president of general economics and trade at the Cato Institute, has cautioned against individual stockpiling, explaining it could lead to scarcity and higher prices overall. "We certainly don’t know if we’re really getting this global tariff thing, and certainly not on day one," he remarked, casting doubt on whether Trump would enforce all proposed tariffs early on.
The economic repercussions of these tariffs extend beyond individuals; they impact large companies too. For example, Patrick Hallinan, CFO of Stanley Black & Decker, disclosed at the company’s investor day meeting their proactive strategy to stockpile goods amid tariff fears, which they hope will mitigate the need for drastic price increases on consumer products.
Trade experts suggest there might be some financial cushioning if tariffs don't materialize as severe as suggested. Some believe Trump may wield these tariffs primarily as negotiation tools rather than enforce them outright. This uncertainty is reflected in various consumer sentiments — only 29% of participants from a Reuters/Ipsos poll supported higher import charges even if it led to increased prices. Meanwhile, 17% believed these tariffs would provide personal benefits.
A Chicago resident, Gaylon Alcaraz, echoed similar thoughts, noting her family has begun stockpiling to avoid being left out should costs rise due to tariffs. "When we see stuff on sale, we say, ‘Let’s just stock up on stuff we had trouble finding before,’" she stated, even as she wrestles with over $200,000 of student loan debt.
Notably, the supply chain dynamics are also felt on company levels. GEP, a business software firm, reported heightened inventory levels among North American manufacturers preparing for potential tariff impacts. "The surge in orders has sparked a jump in production, shrinking the level of spare capacity... to its lowest level since June," GEP noted.
This behavior has manifested itself across various sectors, with manufacturers ramping up production, especially raw materials from Asia, particularly China. Not only is this move preemptive on tariffs but it also sparks potential economic growth during what seems like uncertain times.
Manufacturers hope these strategies help mitigate price hikes for consumers and stabilize their businesses, which can face turbulence with sudden tariff shifts. Meanwhile, economic predictions remain uncertain, with analysts warning of potential repercussions like retaliatory tariffs on U.S. exports.
Industry figures indicate if the incoming Trump administration pushes forward the 25% tariff on goods from Mexico and Canada after January 20, it could severely disrupt supply chains. "Importers may need to pull forward large volumes of goods... before the new administration is seated," suggested analysts from TD Cowen.
Despite the risks, businesses continue to navigate the uncertain terrain. John Piatek, vice president at GEP, indicated companies are now prioritizing crisis management plans focusing on supply chain resiliency and flexibility to adapt to fluctuative tariffs and trade policies. “With the potential for the incoming U.S. administration to impose new tariffs... U.S. importers may need to re-engineer sourcing strategies to mitigate higher costs,” he noted.
Though the future of tariffs remains shrouded in ambiguity, the rush to stockpile goods reflects both consumer concern and proactive corporate strategies to face such potential economic shifts. Whether this behavior will lead to the anticipated price spikes remains to be seen.
