Donald Trump’s War on Christmas
As the holiday season approaches, American families are bracing for a festive period that is expected to cost them around $1 trillion, a 4% increase from last year. However, this surge in spending comes with a caveat: the rising costs of goods due to tariffs imposed during President Donald Trump’s trade war. Families are facing higher prices for everything from artificial Christmas trees to toys and holiday decorations. The average household is projected to spend an additional $132 this year solely due to these tariffs, which, while not crippling, adds pressure to budgets already strained by rising living costs, stagnant wage growth, and increasing unemployment rates. This year, many consumers are opting for cheaper alternatives, purchasing fewer items, and delaying major expenses, as they navigate a challenging economic landscape.
The impact of the trade war is particularly pronounced for small businesses, which have struggled to adapt to the changing market conditions. While larger retailers like Walmart have managed to maintain their sales figures through strategic adjustments—such as stockpiling goods and rerouting supply chains—small enterprises lack the resources and negotiating power to weather the storm. Many small business owners report expecting a significant drop in revenue this holiday season, with 71% anticipating negative impacts from the tariffs. Nichole MacDonald, owner of the Sash Bag, exemplifies the plight of small businesses; she is facing dire circumstances as her inventory remains stuck overseas due to the prohibitive costs of import tariffs. With rising prices and reduced workforce, MacDonald’s situation highlights the broader struggles of small firms, many of which have had to close their doors or lay off employees as they grapple with the financial fallout of the trade war.
As the economy enters a stagflationary period, characterized by stagnant growth and rising prices, the holiday spirit is dampened for many. The combination of government shutdowns, job insecurity, and the looming threat of artificial intelligence disrupting the job market has led consumers to curtail their spending. Retailers are caught in a bind; while they want to attract customers with deals, the tariffs have left them with little room to maneuver on pricing. The uncertainty surrounding the economy and the challenges posed by the trade war have created a difficult environment for businesses and consumers alike, making this holiday season less merry and bright than it could have been. As MacDonald poignantly questions, “Are they literally trying to make it impossible to run a business?”—a sentiment that resonates with many during this critical time of year.
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.”
