Import slowdown, tighter inventories, and falling freight rates signal softer retail demand in 2025
Millions of consumer goods are being re-ticketed in US warehouses with price hikes of up to 15 percent, as importers respond to rising tariffs and trade uncertainty, according to CNBC.
These adjustments—happening well ahead of the back-to-school and holiday shopping period—signal a deepening shift in retail pricing and inventory strategies.
ITS Logistics president Ryan Martin said the company has started re-ticketing products ranging from apparel to household items, noting that “we are now seeing multiple customers increasing pricing.” Depending on the product, prices are rising between 8 and 15 percent.
Martin added, “This is creating additional inflation,” including across e-commerce channels, where pricing updates appear online rather than on packaging.
According to a Q2 survey from the Footwear Distributors and Retailers of America, 55 percent of respondents expect their average retail prices to increase by 6 to 10 percent in 2025 due to tariffs.
Martin compared the current wave of re-ticketing to the pandemic, though at a smaller scale—“Re-ticketing was between 30–40 percent,” he said of that earlier period.
The US Bureau of Economic Analysis reported that gross domestic product contracted by 0.5 percent in Q1 2025.
As per BNN Bloomberg, the drop reversed a 2.4 percent expansion in Q4 2024 and marked the first quarterly contraction in three years. Imports surged 37.9 percent, the fastest pace since 2020, as companies rushed to bring in goods before new tariffs took hold.
That import influx alone cut GDP by nearly 4.7 percentage points.
US consumer spending slowed sharply, increasing just 0.5 percent in Q1, down from 4 percent in the previous quarter.
The Conference Board’s US consumer confidence index fell to 93 in June, its lowest since April and below the 100-level neutral marker. Short-term expectations fell to 69, below the 80 threshold often associated with looming recessions.
Former US Federal Reserve economist Claudia Sahm called the downgrade to spending on travel and recreation “a potential red flag,” reflecting “great consumer pessimism and uncertainty.”
As reported by the Wall Street Journal, the University of Michigan’s consumer sentiment index rose 16 percent in June, but remained 18 percent lower than in December.
While fears of a sharp downturn have eased, S&P Global Market Intelligence projects annualized GDP growth will average 0.8 percent in the first half of 2025, compared to 2.5 percent in 2024.
Meanwhile, the US logistics and warehousing sector is bracing for a milder peak season. Warehouse inventory levels fell 6 percent month-over-month, according to the Logistics Managers’ Index.
Colorado State University’s Zachary Rogers observed that early-June inventory growth proved temporary.
“We haven’t seen any big shifts in transportation yet,” he said, though warehouse capacity “moved from mild contraction to mild expansion.”
CNBC reported that Martin noted that retailers and manufacturers are reducing stock-keeping units and keeping tighter inventories.
“The overall inventory footprint is smaller,” he said. “You are looking at three months of inventory on hand now versus six.”
Rogers also stated, “Even at present inventory levels, we already have a ton of inventory on hand, and with the tariffs that are still in place, I would expect that imports…will be lower than what we would have expected at the beginning of the year.”
CNBC reported that containers at the Ports of Los Angeles and Long Beach are lingering longer, signalling no rush to prepare for the August–September peak. This is reflected in the Port of Los Angeles Optimizer, which forecasts July imports to be lower than July 2024.
Rogers said, “It seems highly unlikely that we will see a normal peak season.”
On the East Coast, the Port of New York and New Jersey processed 774,698 TEUs in May, according to CNBC.
Port director Bethann Rooney said the tariffs would not affect them as severely as on the West Coast, citing a rise in volumes from Europe, India, Vietnam and Southeast Asia.
She described the year-over-year sourcing shift as “just 1 percent,” but said it was enough to “make an impact.”
Further indicating weakness in trade, average spot rates on the trans-Pacific route from the Far East to the US West Coast have dropped 39 percent since June 1, according to Xeneta chief shipping analyst Peter Sand.
He said that following a rollback of proposed 145 percent tariffs, carriers rushed capacity back into the market.
“The Transpacific into US West Coast is the key battleground for carriers… so spot rates have fallen harder and faster,” Sand said, adding that East Coast rates are likely to follow.
Oxford Economics reported that May saw a $4.3bn drop in imports of consumer goods, following a $33bn fall in April. Imports in categories outside of autos remained mostly unchanged.
The firm stated, “We expect imports will trend lower over the course of the year as effective tariff rates remain elevated and the economy slows.”
According to Morningstar chief US economist Preston Caldwell, the average US tariff stands at 18.8 percent, the highest since the 1930s.
He projects this will raise inflation on the personal-consumption-expenditures index to 3.2 percent in early 2026, from 2.3 percent now.
Wall Street analysts expect Q2 earnings for S&P 500 consumer discretionary firms—which include retailers, automakers and restaurants—to fall 5.1 percent year-over-year, according to FactSet.
That compares to a 2.2 percent gain at the end of March.
Policy uncertainty continues to weigh on trade decisions. Martin said, “Indecision is the best decision right now with shippers because of all the tariff talk… It’s better to have lean inventories in this case.”
As per the Wall Street Journal, economists at JPMorgan Chase now place the odds of a US recession within the next year at one-third, down from 60 percent in April.
