trillions and trillions of dollars to reduce taxes and pay down our national debt.” However, multiple economists and retail experts believe that Americans, especially those within the middle- to lower-income brackets, are unlikely to feel “prosperous” in the coming months as tariffs inevitably will raise the cost of essential goods, including groceries and non-essential goods like beauty and alcohol products.  Michael Feroli, the chief US economist at JP Morgan, noted, “We estimate that today’s announced measures could boost prices by 1 to 1.5 per cent this year.” Additionally, Keith Maskus, an economics professor at the University of Colorado, pointed out that domestic consumers almost always end up paying the full share of tariffs. “The share of consumption that low-income households pay for tariffs is much, much higher than it is for middle-income or wealthier consumers,” he said. An analysis conducted by the The Budget Lab, a non-partisan policy research centre run by Yale University, showed that households with an average disposable income of roughly US$43,000, among the lowest in the country, are likely to see disposable income drop 2.3 per cent from the tariffs announced Wednesday versus 0.9 per cent for the highest-earning households, with disposable incomes above US$500,000. While consumer sentiment was already at a rocky point before the announcement of the latest round of tariffs, it doesn’t appear that shoppers will be feeling any more comfortable shopping across multiple retail categories in the coming months.  Categories most affected by tariffs As Global Data managing director Neil Saunders told Inside Retail, “The tariffs come as no surprise, everyone knew they were in the offing. The comprehensiveness of the new tariff regime is more shocking, however, as there are some very high tariff rates. What has been confirmed is that there will be no escape from tariffs. Every company that imports is going to have to deal with higher costs that result from this new way of conducting trade.” John Mercer, Coresight’s head of global research, observed that the majority of groceries and consumer packaged goods are domestically produced, so these categories will be among the least impacted. However, The Budget Lab estimated that the cost of fresh produce in US grocery stores will increase by 2.9 per cent. For example, avocados, about 90 per cent of which come from neighbouring Mexico, will certainly increase in price.  Mercer added that since countries facing especially high tariffs – including China, Vietnam, Bangladesh and India – are the top exporters of clothing to the US, there will be sizable pricing adjustments at scale for apparel brands and retailers alike, although some of these differences won’t be immediately obvious.  Alcoholic beverages, from wine to spirits, are likely to experience a dip in sales as a result of this latest round of tariffs.  Analysts from investment bank and financial services company UBS estimated that large listed spirits makers will have to hike prices by between 2 and 5 per cent to cover the tariffs, or absorb the cost themselves and take a similar hit to operating profit. Beer imports were hit with a 25 per cent levy, in addition to the associated costs of beer cans, which has taken a notable hit thanks to existing aluminium tariffs.  Several French companies warned of a 20 per cent slide in sales and mass layoffs in regions like Cognac, where French brandy is produced for export, largely to the US and China.  Micaela Pallini, the president of Italian trade association Federvini, commented, “Many labels, which cannot be replaced by local production, will disappear from the tables of US consumers, while a serious production and employment crisis is looming in Italy and Europe.” Consumers will seek value for money As tariffs continue to affect various retail categories, retailers will have to step up their game to manage rising supply-chain costs and comfort cost-conscious consumers in any way possible.  Aditya Kaushik, a Coresight analyst, observed that, “With inflation awareness high (and rising), we are likely to see price-conscious shoppers continue to prioritise value for money when shopping multiple categories. “The prevalence of trading down while buying food and nonfood products also indicates opportunity for lower-cost brands and private-label options to capture spending,” Kaushik noted.