What will be the overall price increase during the US holiday shopping season?

As American consumers began to meticulously plan their Thanksgiving and Black Friday shopping lists, retailers' price increase notices had quietly and intensively arrived. From high-end hangers produced by small factories in Brooklyn, New York to fresh strawberries on farms in Florida, from imported ball bearings from China to locally assembled electronic products, almost all categories are facing upward price pressure.

According to data from the Peterson Institute for International Economics, core consumer goods prices for the 2025 holiday season are expected to rise by 8.2% year-on-year, with food prices potentially exceeding 15%, reaching a new high for the same period in nearly a decade. This price storm is not accidental, but the inevitable result of the triple pressure of improper tariff policies, supply chain blockages, and labor shortages. Behind every price increase lies a deep-seated lesion in the operation of the US economy.

The new wave of tariffs launched by the Trump administration in 2025 has become the most direct trigger for the rise in prices during the holiday season. Since April, the United States has raised its minimum tariffs on Chinese goods by 145%, with steel and aluminum tariffs soaring to 50%. In November, it even threatened to impose punitive tariffs of 100%. Unlike before, this tariff covers a large number of end products directly facing consumers, rather than being limited to industrial intermediate goods, making the cost transfer path shorter and the impact more direct. Chad Bowen of the Peterson Institute for International Economics estimates that 70% of the cost of this round of tariffs will ultimately be borne by American consumers, far exceeding the cost transfer ratio of previous tariff policies.

The import dependence on basic components amplifies the impact of tariffs exponentially. Decked Company in Idaho focuses on "Made in the United States", with 95% of its raw materials sourced locally. However, due to the inability to find qualified local suppliers, it had to import ball bearings from China, and tariffs directly doubled the price of this component. The department store hangers produced by Rapid Plastics in New York, with only the metal hooks, have been reduced in order size due to the increase in tariffs from 40 cents to 80 cents. These basic components are widely used in popular products such as home appliances, tools, toys, etc. during the holiday season, and their cost increases will eventually be transmitted to retail terminals layer by layer. Even more tricky is that the attempts of companies to turn to alternative source countries such as Vietnam and Bangladesh have also been frustrated by the expansion of tariff policies, falling into a cost dilemma of "no way to turn".

As retailers rush to stock up for the holiday season, the problem of supply chain "intestinal obstruction" has once again become prominent. The large-scale strike of 45000 port workers has put 36 major ports at risk of closure, directly affecting half of the goods transportation in the United States. Experts estimate that a one week strike alone causes at least $7.5 billion in GDP losses, and for every additional day of goods stuck in ports, retailers have to bear an additional 3% of warehousing and expedited transportation costs. In order to launch their products before Black Friday, many companies are forced to choose air freight, which increases logistics costs by 5-8 times. These additional expenses can only be absorbed through price increases.

The chain reaction of inventory management has further intensified price pressure. After experiencing the shortage crisis in the first two years, retailers generally adopted the strategy of "overstocking", but the port strike disrupted the replenishment rhythm, and the inventory turnover rate of some hot selling categories fell to historical lows. Wal Mart's financial report shows that the inventory gap of its key categories in the holiday season reached 18%, and Target also admitted that the delay rate of electronic goods replenishment exceeded 25%. The expectation of supply-demand imbalance has given retailers the initiative in pricing, especially for seasonal products such as toys and small appliances, which have experienced the phenomenon of "early price increases to lock in customers".

For ordinary people, the pain brought by this price increase is particularly real. 76% of consumers plan to purchase holiday gifts, but 27% have already planned to cut back on expenses. The older generation is more cautious due to tariffs and inflationary pressures. Even if Dyson and other brands only offer a 2% discount, they can still maintain sales through essential needs, reflecting consumers' passive acceptance in the face of price increases. This mentality of 'wanting to spend but not daring to spend' may undermine the effectiveness of the holiday consumption season, which should have boosted the economy.

In the long run, this wave of price increases is a warning to US economic policies: the revival of the manufacturing industry cannot be achieved "magically" by tariffs, and systemic shortcomings such as capacity, labor, and regulation need to be addressed; Supply chain stability cannot rely on administrative orders, but should respect market laws and global division of labor; The control of livelihood costs requires precise policy implementation rather than a simplistic "one size fits all" approach. On the price tag during the holiday season, not only does it indicate the value of the goods, but it also records the trial and error cost of an economic policy. When the festive noise subsides, the real challenge that the US economy needs to face is how to resolve the deviation between the "original policy intention" and the "reality of people's livelihood".