Donald Trump’s War on Christmas
As the holiday season approaches, American families are projected to spend around $1 trillion on gifts and goods this November and December, representing a 4% increase from last year. However, this festive spending comes at a cost, as families are facing higher prices across the board due to tariffs imposed by President Donald Trump’s ongoing trade war. The average household is expected to shell out an additional $132 this year solely because of these tariffs, impacting everything from artificial Christmas trees to toys and holiday decorations. While many shoppers may not feel the pinch immediately, broader economic concerns are weighing heavily on consumer confidence, with rising unemployment rates and stagnant wage growth prompting families to shop more cautiously and seek out cheaper alternatives.
The ramifications of the trade war are particularly severe for small businesses, which often lack the resources to adapt to these new economic pressures. Unlike larger retailers, small firms cannot easily absorb increased costs or shift their supply chains to mitigate the impact of tariffs. Many are struggling to maintain inventory, with some, like Nichole MacDonald of Sash Bag, facing dire situations where products are stuck overseas due to the prohibitive costs of tariffs. MacDonald has had to make tough decisions, including laying off employees and raising prices by 10-15%. Alarmingly, a recent survey revealed that 71% of small-business owners expect the trade war to negatively affect their holiday revenues, with only a meager 5% planning to hire or expand.
The combination of high tariffs, a government shutdown affecting the D.C. economy, and concerns over artificial intelligence and economic growth has led to a stagnation in hiring across various sectors. As businesses grapple with these challenges, the holiday spirit seems dulled by economic uncertainty. Many companies are unable to lower prices to attract customers due to increased operational costs, contributing to a broader sense of unease in the marketplace. As MacDonald poignantly questions, “Are they literally trying to make it impossible to run a business?” This sentiment encapsulates the struggles faced by many small enterprises this holiday season, highlighting the precarious balance between festive spending and the harsh realities of an economy in turmoil.
https://www.youtube.com/watch?v=HGHjbD3XcUs
President Donald Trump might not be ruining Christmas, but he’s making it more expensive. American families are
expected to spend
$1 trillion on gifts and other goods this November and December, roughly 4 percent more than they spent last year. But they’re paying more for everything—artificial trees, ornaments, toys, novelty sweaters. They have fewer
options
to choose from when they log on to Etsy and browse upscale boutiques. Some retailers have stopped shipping to the United States, and some have gone out of business—all thanks to Trump’s globe-engulfing and pointless trade war.
Holiday shoppers might not notice that things are a little less merry and bright than they would have been otherwise. The average family is expected to spend $132
more this year
because of tariffs—not nothing, but not enough to break the bank, either. But wage growth has
been cooling
. The unemployment rate has been rising. Consumer confidence has been
falling sharply
. Rent, co-pays, mortgages, car payments, and utilities remain brutal for average families to afford—and health insurance is about to get radically
more expensive
. In recent weeks, customers have started shopping at cheaper outlets, buying fewer items, and putting off major expenses.
Shoppers are looking for deals, but it has not been easy for stores to provide them. When Trump kicked off the trade war early this year, the White House argued that foreign exporters would pay the fees slapped on goods from nearly every American trading partner. Instead, the government
has collected
$118 billion and counting from domestic importers.
Big companies have managed to dodge and shuffle in response: pressing their
suppliers for discounts
, stocking up and storing
products
to get ahead of the tariffs, rerouting their supply lines, buying merchandise from lightly tariffed countries. Retailers including Walmart have managed to keep their sales figures up and hold costs down, for the most part. Yet many companies have run out of warehoused items, leaving them no choice but to raise sticker prices or cut into their profits.
Small companies have had fewer options. Many small-scale businesses lack the time, bandwidth, or travel budget to find new overseas suppliers—especially when big importers are doing so too. Boutiques don’t have the bargaining power to press manufacturers and shipping companies for discounts. Single-person firms cannot take out loans to buy up stock and move it to the United States before a trade levy hits. Many small firms cannot change their product lines, either.
As a result, the trade war has helped large companies squeeze out their smaller competitors. Many small firms have closed down, fired workers, watched their sales fall apart, or worse. In a
new survey
, 71 percent of small-business owners said they expect the trade war to depress their revenue this holiday season. Only 5 percent said they were hiring and expanding their business.
The holiday season “is our Super Bowl,” Nichole MacDonald told me. “This is when we’re supposed to make all of our money.” MacDonald runs the Sash Bag, a company that manufactures and sells specialty
handbags
. Like many retailers, the Sash Bag generates an outsize share of its annual sales and profits leading up to Christmas. But this year, she said, she is “literally terrified.” Batches of her bags are stuck in two warehouses in India because she cannot produce the $430,000 needed to cover the import tariffs on the goods. “That product is done,” she said. “It’s sewn. It’s perfectly saleable—beautiful leather, beautiful Sash bags, sitting in India for months because I don’t have the budget to bring it here.”
In addition, she has let go some of her employees, raised prices by 10 to 15 percent, canceled special orders, and considered finding new suppliers. But “people don’t understand” how hard that is to do, MacDonald told me, when you have “your own proprietary product, not something a manufacturer has already invented or already created.”
Struggling firms aren’t the economy’s only problem. The government shutdown has depressed the Washington, D.C., metro economy. Concerns about artificial intelligence and the growth outlook have led businesses of all sizes to quit hiring, and some have started firing workers too. Households have noticed those changes and are limiting their spending. Yet companies don’t have much room to win back customers by cutting prices, in many cases—because of the tariffs, which are at their highest effective rate in close to a century. The country is in a stagflationary, queasy state as the year comes to a close, and it’s not doing much for anyone’s holiday spirit.
“Are they literally trying to make it impossible to run a business?” MacDonald asked me. Because “that’s how it feels.”
