The upcoming holiday season could prove to be more costly for American consumers, not due to increased retailer prices, but as a result of tariffs.
What Happened: As per the report by LendingTree, current tariffs are equivalent to a $29 billion tax on the 2025 holiday shopping season.
LendingTree’s study indicates that tariffs would have escalated the total cost of 2024 winter holiday gift shopping by $40.6 billion.
Over 70% of this increase, or $28.6 billion, was transferred directly to consumers. This suggests an extra $132 in costs for every holiday shopper in the United States.
“Anything increasing the cost of holiday shopping creates real challenges for consumers," stated Matt Schulz, LendingTree's chief consumer finance analyst.
He further noted that an additional $132 during the holidays is significant for most Americans, potentially leading to reduced gift-giving or even more debt.
"For most Americans, spending an extra $132 at the holidays is significant. While it may not be earth-shattering, it can have a real impact on many families. It could prompt people to cut back on gift-giving this year or lead to them taking on extra debt. That's a choice no one wants to have to make," he added.
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The report also emphasized that not all gifts are impacted equally. Electronics and clothing or accessories, which make up more than 60% of the additional consumer costs, are particularly affected.
With 88% of all clothing and 69% of electronics being imported, American holiday shopping lists are closely linked to global supply chains and, consequently, to tariff policies.
As per the report, retailers are also under pressure, as they absorbed approximately 29.5% of the total tariff burden in 2024, amounting to around $12 billion.
Why It Matters: While tariffs are designed to protect domestic industries, they often result in higher costs for consumers. In this case, the tariffs are leading to a significant increase in the cost of holiday shopping, which could have a ripple effect on the economy.
Reduced consumer spending during the holiday season could lead to lower profits for retailers and potentially impact economic growth.
Furthermore, the burden of these tariffs is not evenly distributed. Certain sectors, such as electronics and clothing, are more heavily impacted due to their reliance on imports.
This could lead to changes in consumer behavior, with shoppers potentially opting for domestically produced goods or reducing their overall spending.
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