National Retail Federation Projects 6% Decline in U.S. Imports Due to Tariffs

What's Happening?

The National Retail Federation (NRF) has projected a 5.6% decline in U.S. imports for 2025, equating to a reduction of 1.4 million Twenty-foot Equivalent Units (TEU) compared to the previous year. This forecast comes amid new tariffs that are exerting pressure on international trade. The NRF has adjusted its outlook multiple times throughout the year as tariffs were announced and delayed, but now anticipates consistent monthly declines starting in August, with significant drops expected in the fall. Despite the uncertainty, retail imports for the first half of the year increased by 3.6% year-over-year, totaling 12.53 million TEUs at major U.S. ports. However, the implementation of reciprocal tariffs by President Trump and the first trade agreements are expected to impact future import volumes.

Why It's Important?

The projected decline in imports is significant for the U.S. economy, as it could lead to higher consumer prices and reduced availability of goods on store shelves. Small businesses, in particular, may struggle to remain operational due to increased costs and limited inventory. The NRF emphasizes the need for binding trade agreements that lower tariffs to open markets. The anticipated downturn in trade volumes could also affect U.S. exporters, who may face challenges selling their products abroad due to reciprocal tariffs. This situation underscores the broader economic implications of trade policies and the importance of strategic international agreements.

What's Next?

The NRF expects import volumes to remain high in the short term, with a spike to 2.3 million TEU in August as retailers rush to secure inventory before the expiration of a trade pause between the U.S. and China. However, a downturn in trade volumes is anticipated by late September, with import volumes for the last four months of the year projected to decrease by 19% to 21% per month. The NRF's preliminary estimate for total imports in 2025 is 24.1 million TEU, a decrease from 25.5 million TEU last year, indicating a return to pre-pandemic levels.