The New Tariff Landscape: Predicted Impact on Retailers, Consumers & More
Global trade dynamics are shifting rapidly, with new tariffs and retaliatory measures emerging between the United States, China, Canada, and the European Union. This ongoing analysis tracks key developments and their potential impact on advertisers, consumers, and the broader economy—offering strategic insights to help brands navigate a complex and evolving landscape.
The 2025 tariffs could reshape supply chains, influence consumer pricing, and alter market demand—all of which affect how brands position themselves, allocate media budgets, and manage messaging across regions. So, we tapped our agency’s top experts to deliver you exclusive insights on the evolving tariff situation. Read on, or use the table of contents below to skip directly to your topic of interest:
Table of Contents
- Tinuiti’s Recommendations for Advertisers
- Predicted Consumer Impact
- The Latest Updates on the 2025 Tariffs
- Tinuiti Data: Q2 2025 Digital Ad Spend
- Why Does Marketing Spend Matter in an Economic Downturn?
- What’s Happening to Retail Media Ad Spending?
- Ecommerce and the De Minimis Exemption
- Additional Measures Targeting Trade with China
- Helpful Resources
Tinuiti’s Recommendations for Advertisers
The 90-day suspension offers a valuable window for brands to explore alternative sourcing options, renegotiate supplier contracts, or adjust pricing strategies to mitigate financial impacts. Brands should evaluate how the adjusted tariffs impact their supply chains and cost structures, particularly those relying on Chinese imports now subject to higher tariffs.
As we work through the impacts of these tariffs, we understand the circumstances of every partner are different. Below are some of the considerations our team at Tinuiti can help navigate.
- Price Increases & Cost Pass-Through: Brands that are exposed to the effects of these tariffs may need to consider raising prices. Due to the immediate impact on demand and marketing performance, Tinuiti can help brands plan for the effects of higher prices.
- Efficiency Targets: If profitability is impacted by the implementation of tariffs, reevaluate program goals such as ROAS and CPA to ensure efficient growth.
- Budget Reallocation to Cost-Effective Channels: Consider reallocating budget to more cost-effective and performance-based channels and platforms. Our teams can help identify which channels and platforms brands should consider pulling back on first.
- Supply Chain Disruptions: Focus marketing efforts and promotions on in-stock products if shortages occur. Given our recent experience with pandemic-induced shortages in 2020 and 2021, Tinuiti teams are well-versed in how best to navigate these situations.
- Importance of Accurate Data: Performance-based marketing allows for precise tracking of metrics like clicks, conversions, and sales, making it easier to prove the effectiveness of campaigns. In the current environment, any blind spots put a brand at risk of misusing or misdirecting precious marketing dollars.
Predicted Consumer Impact:
Yale Budget Lab has crunched the numbers, finding that under the current configuration of trade tariffs:
- Consumers face an overall average effective tariff rate of 27%, the highest since 1903
- The price level from all 2025 tariffs rises by 2.9% in the short-run, the equivalent of an average per household consumer loss of $4,700 in 2024 dollars
- Apparel prices rise by 64% in the short run
- US real GDP growth is 1.1% lower; in the long-run, the US economy is persistently -0.6% smaller
- The unemployment rate rises 0.6 percentage point by the end of 2025
The Latest Updates on the 2025 Tariffs
August 1, 2025
The Budget Lab (TBL) estimated the effects all US tariffs and foreign retaliation implemented in 2025 through July 31, including the new list of “reciprocal” tariffs to take effect August 7. TBL analyzed the July 31 tariff rates as if they stayed in effect in perpetuity.
- Current Tariff Rate: Consumers face an overall average effective tariff rate of 18.3%, the highest since 1934. After consumption shifts, the average tariff rate will be 17.3%, the highest since 1935.
- Overall Price Level & Distributional Effects: The price level from all 2025 tariffs rises by 1.8% in the short-run, the equivalent of an average per household income loss of $2,400 in 2025$. This assumes the Federal Reserve does not react to tariffs and so the real income adjustment comes primarily through prices rather than nominal incomes; if the Federal Reserve reacted, the adjustment could in part come in the form of lower nominal incomes. Annual pre-substitution losses for households at the bottom of the income distribution are $1,300. The post-substitution price increase settles at 1.5%, a $2,000 loss per household.
- Commodity Prices: The 2025 tariffs disproportionately affect clothing and textiles, with consumers facing 40% higher shoe prices and 38% higher apparel prices in the short-run. Shoes and apparel prices stay 19% and 17% higher in the long-run respectively.
- Real GDP Effects: US real GDP growth over 2025 and 2026 is -0.5pp lower each year from all 2025 tariffs. In the long-run, the US economy is persistently -0.4% smaller, the equivalent of $120 billion annually in 2024$.
- Labor Market Effects: The unemployment rate rises 0.3 percentage point by the end of 2025 and 0.7 percentage point by the end of 2026. Payroll employment is 497,000 lower by the end of 2025.
- Long-Run Sectoral GDP & Employment Effects: In the long-run, tariffs present a trade-off. US manufacturing output expands by 2.1%, but these gains are more than crowded out by other sectors: construction output contracts by 3.5% and agriculture declines by 0.9%.
- Fiscal Effects: All tariffs to date in 2025 raise $2.7 trillion over 2026-35, with $466 billion in negative dynamic revenue effects, bringing dynamic revenues to $2.2 trillion.
(Source: The Budget Lab)
August 1, 2025
President Trump is set to enact a new wave of significant tariffs on nearly 100 trading partners next week, fulfilling his long-held desire to dismantle and reshape the existing global trade system. These double-digit tariffs mark a dramatic departure from the post-World War II trading order, where the U.S. generally maintained low import taxes under the World Trade Organization (WTO). (Source: The New York Times)
June 6, 2025
Tariffs cause major uncertainty and negative impacts on the US retail and advertising markets. Retailers like Amazon, Walmart, and Best Buy are seeing disrupted supply chains and fears of higher prices, despite some temporary relief from reduced tariffs on Chinese goods.
The ad market is particularly vulnerable, with total US media ad spending projected to fall significantly under heavy tariffs. Companies like Temu and Shein have already drastically cut their ad spending. While retail media may see some growth, overall, the industry faces substantial financial and strategic challenges due to the unpredictable tariff environment.
(Investor’s Business Journal; Tinuiti Data)
May 29, 2025
New tariffs pose a significant threat to the growth of the US advertising market in 2025. According to an April 2025 forecast, total US media ad spending could plummet to $394 billion under a heavy tariff scenario, effectively erasing any projected gains for the year.
This downturn is already showing signs:
- Temu and Shein, major online retailers, sharply cut their Google Shopping ad spending in April 2025. This indicates that tariffs are directly impacting companies’ advertising budgets and strategies.
- Upfront Linear TV ad spending is projected to suffer significantly, potentially falling by 23.5% to $13.4 billion under heavy tariffs.
- However, retail media ad spending is expected to remain resilient, with an anticipated growth of 8.5% in 2025 even with heavy tariffs.
(Source: eMarketer; Tinuiti Data)
May 29, 2025
The Trump administration is developing a “Plan B” for imposing tariffs, as a recent court ruling deemed his use of emergency economic powers (IEEPA) to implement sweeping duties illegal. While a federal appeals court has temporarily allowed the existing tariffs to remain in effect during the appeal process, the administration is exploring alternative legal avenues to maintain its aggressive trade policy. (Source: The Wall Street Journal)
May 29, 2025
A federal trade court has struck down tariffs imposed by President Trump on nearly all U.S. trading partners, ruling that he exceeded his authority under the International Emergency Economic Powers Act of 1977 (IEEPA).
The decision, handed down by the Court of International Trade, stated that the IEEPA does not grant the President “unbounded authority” to impose such sweeping tariffs and that an “unlimited delegation of tariff authority would constitute an improper abdication of legislative power.” (Source: The Wall Street Journal)
May 2, 2025 – Updated Tinuiti POV
- Sensitive Communication of Price Increases: Communication of cost increases is a highly sensitive topic, for both economic and political reasons. Amazon this week confirmed that it had considered displaying the cost of tariffs on the checkout pages for Haul, its Shein/Temu clone; within hours, the White House press secretary excoriated the company for “a hostile and political act.” Amazon subsequently clarified that the idea “was never approved and is not going to happen.”
Most companies are not under the kind of microscope that Amazon is, and will have more discretion to communicate with their customers without fear of presidential denunciation, but merchants would do well to consider potential backlash, and to frame price rises as neutrally as possible. - Divergent Consumer Signals | Spending vs Sentiment: Despite strong current retail spending and easing inflation, consumer confidence has dropped to its lowest point since the early months of the pandemic, and consumer expectations – composed of business conditions, employment prospects, and future income – dropped to its lowest point in 14 years.
- Rising Concerns Amidst Healthy Labor Market: Consumers are increasingly worried about job security and believe business conditions are worsening, despite the current health of the labor market.
- Anticipation of Economic Downturn & Preparation: Both consumers and experts anticipate that tariffs will lead to broader economic challenges, with credit card companies preparing for increased defaults as a cautious approach to a likely summer downturn prevails.
(Sources: WSJ, Bloomberg, Apollo, WSJ, Tinuiti Media Update)
April 28, 2025
Temu adds import charges of about 145% in response to President Trump’s tariffs, doubling the price of many items. Rival discount retailer Shein has also hiked prices on its site, but it doesn’t appear to be implementing import charges. (Source: CNBC)
April 21, 2025
As advertisers get buffeted by tariff-induced uncertainty and a precipitous drop in consumer confidence, Amazon appears to be emerging as an early beneficiary. Tinuti data found that spending on Prime Video rose 29% between fourth quarter 2024 and first quarter 2025, fueled by competitive CPMs and its large audience of ad-supported users.
Among endemic advertisers — brands also selling products on Amazon — the DSP accounts for 34% of Amazon investment among Tinuiti clients, up 2% from Q4. Investment on both search and the DSP grew.
Tinuiti clients spent 12% more year-on-year on Amazon’s DSP, and 11% more on its search ads during the same period. “It’s a recurring theme with the brands we work with [that the] DSP has been the faster growing part of the Amazon ecosystem. That said, we do continue to see the search part of the business continue to grow as well,” said Andy Taylor, VP of Research at Tinuiti. (Source: Tinuiti Data; Digiday)
April 18, 2025 – Updated Tinuiti POV
As we predicted in March, the anticipated cooling ad market due to tariff uncertainty is now a reality as the U.S. re-imposed tariffs on Chinese imports, impacting cost structures and consumer behavior. Brands in electronics, auto, and CPG are acknowledging economic hardship in their ads, echoing pandemic-era messaging. Tinuiti data revealed that Temu, a significant Super Bowl advertiser in 2024, has drastically cut ad spending following the tariffs and de minimis policy changes, with their U.S. Google Shopping ad impressions falling from 19% to 0% in a short period.
According to a new eMarketer analysis, social media, linear TV & gaming media are poised to absorb the greatest impact from diminished budgets. Performance-oriented digital channels might be more resilient due to measurable results, though all platforms could see pressure as brands prioritize loyalty programs and organic strategies. Ad buyers are revising 2025 forecasts, focusing on lower-funnel tactics for quicker results.
Despite cooling inflation and modest consumer sentiment, retaliatory tariffs and supply chain issues create a cautious marketing environment. Unlike gradual monetary policy changes, trade actions have swift, significant effects. Agility is crucial for performance marketers in this era of fluid budgets and rapid re-forecasting. Brands aligning with finance, using flexible buying, and focusing on conversion will fare best short-term. Those absorbing tariff costs and maintaining brand awareness may gain a strong long-term advantage.
April 15, 2025
Temu’s share of impressions in Google auctions has fallen to 0% in the past week. As of March 31, 19% of U.S. Google Shopping ad impressions were bought by Temu. By April 12, that figure had dropped to zero, a strong signal that Temu is no longer aggressively bidding for visibility in the space. (Source: Tinuiti Data; Reuters; Adweek; CNBC)
April 11, 2025
China responded to President Trump’s tariffs on Friday, raising its own tariffs on American goods to 125 percent, as the world’s two biggest economies extended a fast-moving tit-for-tat that has seen the cost of trade soar and fueled concerns over a global recession. (Source: NYT)
April 9, 2025 – Updated Tinuiti POV
Tariffs Imposed by The United States
President Trump on Wednesday (4/9) announced – by executive fiat, with no involvement from Congress – a 90-day pause on the “reciprocal” tariffs he’d announced on April 2nd, applying to all trading partners apart from China. That means the currently-in-force tariff schedule (and this can change at any moment) is:
- Canada and Mexico – USMCA-compliant goods are not subject to import taxes. Non-compliant goods are subject to a 25% tax, while Canadian energy is subject to a 10% tax.
- China – Chinese imports are now subject to a 145% import tax.
- All other countries – 10% baseline import tax.
Tariffs Imposed by Other Countries on American Goods
Foreign nations have not sat by impassively while the United States has threatened tariffs at a level not seen in a century (though economists would argue they should!). Retaliatory tariffs have been imposed along the following lines:
- China – American goods exported to China face a tax of 125%, effective Saturday.
- European Union – The EU approved a package of product-specific duties, though those have now been paused in response to the American pause.
- Canada – USMCA non-compliant automobiles made in America now face a 25% tax when they cross the Canadian border.
So where we’ve netted out is with higher taxes on American importers, higher taxes on the customers of American exporters, and a potential end to one of the most significant bilateral trading relationships in human history.
Market Reaction: The market unambiguously dislikes tariffs. Immediately following the President’s “Liberation Day” announcement on April 2nd, equity markets plunged; when he announced a pause of the reciprocal tariffs on the 9th, equities soared. Markets sank again on the 10th, possibly because expectations of further pullbacks from the universal tariffs were not forthcoming.
April 5, 2025
Trump’s 10% minimum tariff on nearly all countries and territories takes effect.
April 4, 2025
China announces plans to impose a 34 percent tariff on imports of all U.S. products beginning April 10, matching Trump’s new “reciprocal” tariff on Chinese goods, as part of a flurry of retaliatory measures.
April 3, 2025
Trump’s previously-announced auto tariffs begin. Prime Minister Mark Carney says that Canada will match the 25 percent levies with a tariff on vehicles imported from the U.S.
Tinuiti Data: Q2 2025 Digital Ad Spend
US Advertisers Continued to Grow Investment Across
Most Major Ad Platforms in Q2
According to our most recent Digital Ads Benchmark Report, ad spend growth accelerated across Google paid search, Meta, Amazon Sponsored Products, and YouTube in the second quarter, in line with expectations as many platforms saw softer year-ago comparisons in Q2 than in Q1.
While tariffs are directly impacting the spend of some advertisers, in aggregate they have not significantly influenced ad investment to this point. Many brands have taken other measures such as renegotiating contracts and shifting production where possible to protect margin while maintaining ad budgets.
At least part of the reason ad spend has held up is the rollback of the most severe tariffs, with the once 145% rate on Chinese goods reduced to 30% in May, which clearly had a meaningful impact on China-based brands like Shein and Temu. Both Shein and Temu appeared to pause Google shopping ads entirely in mid-April, seemingly as a result of the end of the de minimis exemption. Shein reactivated a little over a month later once the tariff rate was revised to 30%, and Temu started to reappear sparingly in Google shopping Auction Insights reports at the end of June.
There remains significant uncertainty surrounding the ultimate shape of US tariffs and whether any rates established will be more than temporary given the administrations rapidly shifting policies over the last several months.
Why does marketing spend matter in an economic downturn?
Reduced Noise Creates Opportunity
- McGraw-Hill Study (1986): Companies that kept advertising during the 1981–1982 recession saw 256% more sales growth five years later than those that cut spend.
- Millward Brown (2009): Brands increasing marketing spend during the 2008 crisis saw better ROI and stronger brand equity.
- With competitors retreating and media costs often dropping, maintaining visibility becomes more efficient — and more valuable.
Marketing Signals Confidence and Stability
- Harvard Business Review (2010): Companies that continued investing in marketing, R&D, and CX during recessions outperformed peers in profit and sales by 10%+.
- In volatile times, visibility signals leadership. Silence may suggest instability.
Trust is Built in Uncertainty
- Edelman Trust Barometer (2023): 71% of consumers cite brand trust as a top purchasing factor.
- Consistent communication in tough times builds long-term customer loyalty.
Marketing Must Adapt, Not Disappear
- Brands like Nike, Amazon, and Airbnb successfully adapted messaging during COVID — staying active while shifting tone and focus.
- Les Binet and Peter Field recommend a 60% brand / 40% activation mix even during a downturn.
For Brand & Performance Media
According to The Advertising Research Foundation: Seven empirical studies analyzed the effect of firm advertising on sales or market share. A review of these empirical studies suggest that there is strong and consistent evidence that cutting back on advertising during a recession can hurt sales during and after the recession, without generating any substantial increase in profits. Such cutbacks can result in a loss in capitalization. On the other hand, not cutting back on advertising during a recession could increase sales during and after the recession. Moreover, firms that increased advertising during a recession experienced higher sales, market share, or earnings during or after the recession. Most of the studies consistently showed that the strategy adopted for advertising during a recession had effects that persisted for several years after the recession.
What’s happening to retail media ad spending?
- The tariffs are inevitably introducing economic instability, which naturally prompts advertisers to reassess their spending strategies and potentially reduce their budgets in light of a possible economic slowdown.
- Retail media faces headwinds due to margin compression, particularly those platforms heavily reliant on suppliers from affected countries.
- In light of this, it’s more critical than ever to ensure strategy and tactics are streamlined for efficiency, and that every marketing dollar is making the most impact. We’re working closely with client teams to ensure we’re minimizing waste, channeling efforts toward growth, and doubling down on the real-time optimizations that ensure clients remain best positioned to continue seeing positive outcomes and achieve their respective business goals.
Ecommerce and the de minimis Exemption
Certain ecommerce merchants have been particularly alarmed by the prospect of new duties on Chinese goods because of their reliance on the so-called de minimis exemption. The De Minimis Tax Exemption is a law passed by Congress that allows shipments bound for the US and valued under $800 to enter the country free of duty and taxes. The Trump Administration’s executive order will end the de minimis exemption.
This matters because the de minimis exemption has been crucial to the business model of hugely important China-based ecommerce players like Shein and Temu. Both platforms ship customer orders directly from China under the de minimis provision, allowing them to keep prices extremely low (indeed, both are famous for their ultra-low prices). The new rules would end the exemption and raise the costs of getting these goods to the United States, eroding the price advantage of Shein and Temu, which will likely end up in higher prices faced by American consumers.
Temu, which infamously bought five Super Bowl spots back in 2024, has massively curtailed ad spend. Adweek (in partnership with the Research & Analysis team) notes that while 19% of U.S. Google Shopping ad impressions were bought by Temu as recently as March 31, this has since declined to 0% as of April 12th.
Additional Measures Targeting Trade with China
Chinese Tariffs: Implications & Considerations
American businesses and consumers are now dealing with 10% universal tariffs, 145% tariffs on Chinese goods, and a huge amount of uncertainty over what tariff rates might be tomorrow.
That is not the only concern facing those who wish to conduct commerce across political borders. The US Trade Representative announced back in February, and is now revising, plans to impose steep port fees on Chinese-built vessels. The original plan was to impose fees between $500k – $1.5m for each port call, though the revisions are aimed at lessening the impact on American consumers.
Impact of Higher Port Fees on Chinese-built vessels
One impact of higher port fees would be for shippers to only dock at the largest ports, skipping all the second- and third-tier ports. This would obviously not be helpful to the industries and jobs built up around those ports.
A second impact, related to the first, would be greater congestion and longer product landing times at the largest ports (Los Angeles, Houston, New York), similar to what we saw during the pandemic.
A third impact would be, of course, higher final prices to consumers.
There is not, unfortunately, ready American capacity that can take over this kind of cargo shipping.
This sobering reality is downstream of the Merchant Marine Act of 1920, better known as the Jones Act, which for over a century now has restricted water transportation of cargo between U.S. ports to ships that are U.S.-owned, U.S.-crewed, U.S.-registered, and U.S.-built. The result has been a domestic shipbuilding industry that has withered almost to nothing; there might be a lesson here for advocates of protective policies in the name of reinvigorating targeted industries.
Helpful Resources
- White House Fact Sheet on new trade duties
- Yale Budget Lab estimates of economic and fiscal effects
- Peterson Institute for International Economics on the future of the USMCA
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