The near-term future: This year’s Fourth of July celebrations could be dimmer—and pricier—due to the escalating US-China trade war.

• Staples of Independence Day festivities, like fireworks and flags, are predominantly manufactured in China, leaving them directly exposed to tariffs (To keep track of the latest shifts, check out our Live FAQ: The Impact of Trump’s Tariffs on Consumers, Businesses, and Trade).
• Outdoor cookout essentials, including grills, accessories, and patio furniture, are similarly caught in the crossfire. For example, about 80% of Traeger’s grills were made in China in fiscal 2024, with the remainder produced in Vietnam. Current tariff policies impose duties of 45% on Chinese-made grills and 35% on those from Vietnam, translating to higher prices and tighter supply chains as Americans prepare for their summer celebrations.

Empty shelves ahead: The repercussions won’t end with Independence Day. Retailers are bracing for limited product availability as the critical back-to-school and holiday seasons approach.

• Tariffs are already prompting companies to scale back import orders, driving cargo volumes at the Port of Los Angeles—a key entry point for goods from China—into a steep decline. Volume is projected to fall 35.1% YoY this week alone, marking the second straight week of sharp drops. Roughly one-quarter of scheduled ship arrivals in May are also expected to be canceled, Gene Seroka, executive director of the port, told CNBC.
• Shoppers will first feel the pinch in back-to-school aisles. A child hoping for a blue backpack may have to settle for a red one. The strain will also be evident when shopping for higher-ticket items like strollers—nearly all of which are manufactured in China—where limited supply will likely translate to steeper prices.
• The pressure could crescendo during the holiday season. With approximately 80% of toys sold in the US made in China, families may face fewer options and inflated price tags. President Donald Trump acknowledged the issue, recently saying: “Well, maybe the children will have two dolls instead of 30 dolls, you know? And maybe the two dolls will cost a couple of bucks more than they would normally.”

Our take: The US-China trade war is already reshaping the retail landscape. As tariffs drive up costs and disrupt supply chains, retailers and brands must make difficult decisions on pricing, inventory, and assortment. From July Fourth staples to holiday gifts, pressure is mounting just as consumers expect both value and variety. With margins already thin and uncertainty intensifying, the coming months will test how well retailers and brands can adapt—and how much consumers are willing (or able) to absorb if prices continue to rise.

Go further: Read our report Impact of Tariffs on US Businesses.