The Unspoken Crisis: Tariffs and Retail’s Silent Struggle
Former Sears Canada CEO Mark Cohen has broken the corporate silence surrounding the escalating trade war, accusing fellow executives of “cowardice” for failing to challenge President Trump’s tariff policies. As the crucial holiday season approaches, Cohen warns that temporary solutions have expired and the retail industry faces its most significant challenge in decades.
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“The party is over now,” Cohen stated unequivocally in his Fortune interview. “The goods you see on shelves in advance of this holiday season will have been fully burdened by tariffs.” His comments highlight a growing concern among industry experts about the cumulative impact of trade policies on both businesses and consumers.
The Hidden Time Bomb in Supply Chains
Unlike traditional taxes paid at point of sale, tariffs hit long before products reach store shelves, creating what Cohen describes as “a hidden time-bomb lodged inside the U.S. economy.” This fundamental difference in timing has created unprecedented challenges for importers and retailers alike.
Companies must now front tariff payments before goods clear customs, triggering what Cohen identifies as a liquidity crisis across “tens of thousands” of smaller importers. The sudden financial burden has forced many businesses to reconsider their entire operational structure amid broader industry developments affecting multiple sectors.
From Temporary Fix to Permanent Problem
Throughout spring and summer, retailers employed various strategies to mitigate initial tariff impacts. Stockpiling inventory and subtle quality reductions allowed many to maintain price points during the back-to-school season. However, Cohen emphasizes these were temporary measures that have now exhausted their effectiveness.
The situation has become particularly dire for small-to-medium manufacturers and retailers, which Cohen compares to facing “a deadly COVID-19-like-crisis.” Even industry giants aren’t immune, as evidenced by IKEA’s recent price increases—a significant departure from their traditional low-price strategy that signals deeper market troubles ahead.
The Ripple Effect Across Industries
The tariff impact extends far beyond retail, affecting numerous sectors including technology and manufacturing. Recent market trends in battery technology and energy storage demonstrate how interconnected global supply chains have become vulnerable to trade policy changes.
Similarly, advances in recent technology across artificial intelligence platforms show how innovation depends on stable international trade relationships. The current uncertainty makes long-term planning increasingly difficult for companies across the technological spectrum.
Corporate Silence and Economic Consequences
Cohen expresses particular concern about the business community’s reluctance to publicly challenge tariff policies. He suggests executives might be “privately” lobbying the administration but sees this approach as ineffective against what he describes as “catastrophe personified.”
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The entertainment and technology sectors show alternative approaches to industry challenges through strategic partnerships, as seen in related innovations involving AI companies and creative professionals. Such collaborative models might offer lessons for retail industry leadership.
Global Retaliation and Economic Uncertainty
Cohen warns the U.S. has entered a “retaliatory spiral” with international partners. China’s restrictions on rare-earth minerals, Canada’s responses to timber and auto tariffs, and European countermeasures all contribute to an increasingly complex global trade environment.
This uncertainty affects business planning at fundamental levels, making inventory management and pricing strategies increasingly speculative. The situation mirrors challenges faced in other sectors, including industry developments where companies must navigate rapidly changing regulatory and market conditions.
The Path Forward: Transparency and Advocacy
Cohen advocates for greater corporate transparency and direct engagement with policymakers. If still leading Sears Canada, he claims he would clearly identify tariff-related price increases on tags to educate consumers and build pressure for policy change.
With 70% of Americans living paycheck to paycheck and holiday shopping season approaching, the stakes couldn’t be higher. Cohen believes continued corporate silence risks “a deep recession” as inflation, supply chain disruption, and political retaliation converge into what he describes as a “perfect storm” for the U.S. economy.
The coming months will test both corporate courage and consumer resilience as the full weight of tariff policies finally reaches store shelves and household budgets across America.
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