How tariff anxiety is impacting shopping behavior and retailer ad spend

Sweeping import tariffs are causing economic turmoil. The University of Michigan's Consumer Sentiment Index, which measures how Americans feel about the economy, fell to 50.8—the second-lowest result on record.

And yet, March saw a retail boom as anxious consumers went on a spending spree. Sales surged as shoppers scrambled to stock up on everything from cars and electronics to apparel and home improvement goods ahead of price hikes. According to the U.S. Department of Commerce, overall retail sales were up 1.7% in March, the most significant monthly gain in over two years. April retail sales were more modest, increasing by only .1%, but remained up 5.2% year-over-year.

Many experts have predicted a spending slowdown in the coming months, and the decrease in retail momentum could signal it’s not far off. Consumers may be growing cautious as further tariff uncertainty mounts and new prices begin to hit shelves. And businesses are recognizing the changing tide—61% of retailers froze or drew down advertising spend in April.

A brief review of the tariffs timeline

Tariffs can change by the week. At the time of publishing, here are the key changes:

March 4 – 25% tariffs on imports from Canada and Mexico take effect.

March 12 – 25% tariffs on imports of steel and aluminum take effect.

April 2 – President Donald Trump announces broad, global tariffs. The tariffs start at 10% on all imports, with higher “reciprocal” tariffs on specific countries of origin.

April 3 – A 25% tariff on imported cars and car parts takes effect.

April 9 – Trump pauses country-specific reciprocal tariffs for 90 days, excluding those on China, which he increases to 145% after a series of escalations.

April 12 – Trump temporarily exempts smartphones and computers from reciprocal tariffs on China. However, they still incur a 20% “fentanyl tariff.” This exception applies to products entering the U.S. or removed from warehouses “for consumption” on or after April 5.

April 29 – Trump signs an executive order to provide temporary tariff relief to U.S. automakers through April 30, 2027.

May 2 – The de minimis rule, which allowed imports under $800 to enter duty-free, no longer applies to goods coming in from China and Hong Kong. Tariffs of 120% and a $100 fee per parcel are implemented.

May 12 – The U.S. and China agree to a 90-day tariff truce. The U.S. reduces tariffs on Chinese goods from 145% to 30%. Both countries suspend additional retaliatory tariffs and non-tariff measures during this period.

May 14 – The de minimis rule reversal is modified to decrease the tariff from 120% to 54%, maintaining a $100 fee per parcel.

July 8 – Paused reciprocal tariffs will resume on countries except China, unless further agreements are reached.

August 12 – The 90-day U.S.-China tariff truce is scheduled to end, and tariffs may revert to prior levels if no new agreement is reached.

How consumers are reacting

The stop-and-go nature of the tariffs makes it difficult to determine exactly how and when prices will rise. It's safe to assume prices will begin to go up as existing domestic inventory of impacted products runs low and new shipments arrive. This nebulous window of time drove anxious consumers to front-load major purchases.

Here’s what they've bought.

Motor vehicles

The March retail surge was largely driven by car buyers as auto sales jumped 5.3% from February. In April, sales dipped by .1% but remained up 9.4% year-over-year.

A study published by the Center for Automotive Research (CAR) found that tariffs could add an average of $8,722 and $4,239 to the costs of imported and domestic vehicles, respectively. Consumers made a major dent in U.S. vehicle supply, purchasing new cars to avoid impending price increases. Costs could spike as new inventory arrives—if it arrives at all. Some foreign automakers, including Audi and Volkswagen, paused all imports, while many U.S. car companies held shipments from their manufacturing plants outside the country.

Consumer electronics

Retail sales at electronics stores went up 1.5% in March and .3% in April. Electronics are at the center of tariffs on China, so smartphones, laptops, tablets, smartwatches, household electronics, and small kitchen appliances are all at risk of price hikes.

Once warehouse shelves are empty, some retailers may pass import costs on to consumers. In March, Best Buy stated its prices would inevitably rise on imported products.

Taking a different approach, Apple airlifted approximately 600 tons of iPhones—around 1.5 million units—from India to the United States in early April. The tech giant also plans to shift much of its production to India, which faces lower tariffs than China. Though given a temporary exemption from the Chinese tariffs, smartphones are still subject to the 20% fentanyl tariff and could get more expensive when stock dwindles.

Fashion apparel, shoes, and accessories

Sales at clothing stores increased 1.1% in March. In April, sales dipped by .3% but still grew 3.5% year-over-year.

Tariffs will impact both foreign and domestic products, ranging from fast fashion to premium luxury brands. In fact, the levies disproportionately affect clothing and textiles, according to the Yale Budget Lab, which reports that prices on leather goods (including shoes) and apparel increase by up to 19% and 16%, respectively.

Chinese fast fashion manufacturers Shein and Temu announced price increases ahead of the de minimis rule change and encouraged shoppers to place large orders beforehand. Though facing far lower tariffs than Chinese manufacturers, premium European brands are taking similar approaches. French fashion house Hermès, which depends on the U.S. for 20% of its sales, has already announced it will pass tariffs through to customers.

American-made luxury goods like jewelry could also go up in price due to levies on raw materials. The Gems and Jewellery Export Promotion Council reported that precious gem exports from India to the U.S. rose in March in anticipation of new tariffs.

Home improvement goods

Sales at building and garden supply stores jumped 2.9% in March and .8% in April.

Major appliances sold at home improvement stores, such as refrigerators, dishwashers, and microwaves, rely heavily on imported parts from Mexico and China, and are expected to increase in price.

Tariffs on aluminum, steel, and lumber will drive up the cost of building supplies, including tools. American company Stanley Black & Decker stated it would explore price adjustments in addition to supply chain modifications. Alternatively, The Home Depot shared that it intends to keep prices steady, but would stock fewer imported products.

How retailers are reacting

Experts expect a more substantial slowdown as consumers grow more wary of the shifting economic landscape. The Yale Budget Lab currently estimates tariffs will increase overall consumer prices by 1.7% short term, resulting in thousands of dollars in lost household purchasing power.

Ramp data shows that the retail industry is bracing for reduced consumer spending. As shown in the chart above, 61% of retailers froze or reduced advertising budgets in April.

But retailers are also reacting in real time as tariffs change.

When the 90-day truce with China was announced, stores like Walmart—which announced its prices would rise later this month—raced to import frozen cargo shipments before tariffs could rise again.

What it means for businesses

Shifts in consumer behavior can significantly impact industries beyond retail. Consumer spending is a key economic indicator, accounting for around 70% of U.S. GDP—meaning companies in all sectors should remain aware of current trends. Plus, some businesses may need to modify their own purchasing as international trade evolves.

Follow stories on Velocity and data from the Ramp Economics Lab for more insights.