JUANA SUMMERS, HOST:
What exactly is happening with tariffs, and are they causing higher prices? These are the most common questions asked about President Trump's trade plans. And we have asked NPR's Alina Selyukh to tell us what we know about how tariffs are trickling down to our shopping - or are they? Hi, Alina.
ALINA SELYUKH, BYLINE: Hello, hello.
SUMMERS: So Alina, what is the answer to that? Are tariffs causing higher prices?
SELYUKH: Are you ready for my favorite answer of all time?
SUMMERS: (Laughter).
SELYUKH: It depends. It depends on the item. It depends on the store. But I guess, yes, some things are going up in price because of tariffs. For example, starting in June, we began to see prices going up faster on clothes and shoes, which are predominantly made abroad. And, of course, these are items that people might be especially noticing, given that we are in back-to-school shopping season. But some stores, including the big ones like Amazon and Walmart and Target, are really trying to keep back-to-school prices down.
SUMMERS: Interesting. So, I mean, is that what's happening? We've heard for months that President Trump's tariffs would cost shoppers dearly, but that hasn't quite happened. Is that because stores are keeping prices down?
SELYUKH: Well, a few things are going on. First of all, the biggest tariffs keep getting pushed back. After Trump first announced tariffs in April, the tax on Chinese imports, for example, at one point jumped to 145%, but the stock market plummeted, shipments almost ground to halt and that tariff rate was temporarily lowered to around 30%. For most countries, the tariff plan has been largely on pause all summer, and it's now delayed again until later this week. And so the second factor - and it's the biggest one - which is that companies have had a lot of time to stockpile stuff before many tariffs kick in.
SUMMERS: Meaning that they got shipments into the U.S. without having to pay high new import costs?
SELYUKH: Exactly. We had a story in May, for example, about a pet product seller in Maryland stashing his dog life jackets in the bathroom because his warehouses were just bursting. I've talked to Amazon sellers, clothing retailers, all still working through stockpiles from the time when tariffs were still low and they were able to either eat those costs for now or split them with the manufacturer or distributor.
Zac Rogers at Colorado State University, who closely monitors supply chains, told me that so many imports were rushing into the U.S. early this year that it looked like we were about to have a second Black Friday or second Christmas - like peak time.
ZAC ROGERS: A lot of the things that consumers have bought so far is from that first surge, which is one of the reasons why we haven't had the really high costs yet because we did bring so much stuff in early.
SELYUKH: But he says that won't last. Warehousing costs are starting to pile up and new shipments will start facing higher tariffs.
SUMMERS: Alina, is there any indication of when we might actually start seeing that reflected in the prices that we see at the stores?
SELYUKH: Yeah, there's just so much we don't know because tariffs still keep changing, timelines keep changing. On some highly imported items like furniture and clothes, as I mentioned, prices are starting to tick up, but not dramatically. Once stockpiles run out, manufacturers and retailers will have to decide how much tariffs they're willing to keep absorbing. Already, consumer giant Procter & Gamble said it plans to raise prices on about a quarter of its products by an average of 2 1/2% in the coming months. The company thinks that amount is going to be so close to regular inflation that maybe people wouldn't really notice. But under the surface, that's the tariff cost getting passed on to shoppers. The big question is whether the timing lines up with the holiday shopping season, which is when, you know, both the shoppers and the sellers will be really counting their dollars.
SUMMERS: That's NPR's Alina Selyukh. Thanks so much.
SELYUKH: Thank you. Transcript provided by NPR, Copyright NPR.
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