COLUMNS
Tariffs Off, Uncertainty On: Retail’s Real Cost in a Volatile Policy Cycle Don’t pop the champagne on tariffs just yet. Some trade duties have been repealed, but the bigger picture remains unsettled. Legal challenges continue, and policies keep shifting. For retailers and real estate professionals, the real issue isn’t the tariffs themselves — it’s uncertainty about what’s coming next. That unpredictability drives up costs, disrupts supply chains and complicates planning.
Abe Schlisselfeld CPA, EA Real Estate Industry Leader CBIZ abe.schlisselfeld@CBIZ.com (212)201-3159
What Just Changed — and What Hasn’t Repealing certain tariffs might offer short-term relief, but victories on paper rarely translate into immediate benefits. Litigation could delay or modify the impact, and even if tariffs remain lifted, costs could reemerge in other forms, such as taxes, regulations or policies aligned with an “America First” approach. Whether importing consumer goods, fixtures or specialty materials, retailers still face higher costs. Tariff relief is temporary; volatility remains the biggest challenge. Even when tariffs are lifted, businesses often face hidden cost pressures. Domestic alternatives can be more expensive, shipping schedules remain unpredictable and supply chain disruptions linger. Companies that rely on tariff relief as a permanent solution may find themselves scrambling if policies shift again. Retail’s Forward-Looking Calculus Managing direct refunds linked to past tariffs is nearly impossible. Relief typically comes through future pricing strategies or margin adjustments, not through retroactive rebates. Even after tariffs are lifted, domestic sourcing often remains more expensive than imports, which limits the potential for significant price cuts. Retailers must strike a delicate balance: setting competitive prices while safeguarding margins against future policy shifts. Fragile consumer confidence amplifies this challenge. Hesitant shoppers slow sales, curb discretionary spending and complicate forecasting. Even when tariffs are reduced, the benefits might not fully materialize if shoppers remain cautious. Retailers are managing an environment where both costs and demand fluctuate unpredictably. Construction and Real Estate: Navigating Volatility For retail developers and landlords, tariff uncertainty creates unique challenges in construction and tenant improvements. Materials once subject to duties — steel, aluminum and specialty fixtures — could become more affordable if tariffs remain lifted, but domestic alternatives often come with higher costs. What looks like savings today can quickly be wiped out if policies shift again. Construction schedules, design choices and tenant improvement budgets all feel the impact of policy whiplash. Developers must recalibrate timelines,
68 MANN REPORT | MAY 2026
secure flexible procurement arrangements and anticipate cost fluctuations in the most trade-sensitive categories. Financing assumptions shift as well: lenders and investors increasingly factor tariff-related volatility into budgets, tenant improvement allowances and ROI expectations. Broader redevelopment decisions are also impacted. Renovations, retrofits or store expansions might be delayed or scaled back if costs rise unexpectedly. Even tenant product choices can change, affecting space requirements or build-out plans. Policy volatility can ripple through the entire retail real estate ecosystem, influencing both strategy and execution. The Bigger Picture: Persistent Pressure on Imports Even with short-term tariff relief, the administration’s effort to cut reliance on imports signals ongoing pressure on certain sectors. Domestic alternatives often have higher costs, keeping input prices high and unpredictable. Retailers and developers must contend not only with current tariffs but also with the broader shift toward “Made in the USA” sourcing requirements. Rapid changes in trade policies, import duties and supply incentives force companies to adapt their sourcing, pricing and expansion strategies quickly. For businesses operating on thin margins or managing large portfolios, these fluctuations can be more disruptive than stable, predictable costs. Companies that do not account for these shifts risk overspending or misallocating resources, impacting both short-term profits and long-term growth. Consumer Sentiment Amplifies the Risk Weak consumer confidence amplifies the impact of policy changes. Cautious shoppers slow down store growth, suppress spending and make forecasting more difficult. Modest tariff relief alone won’t produce real benefits if demand remains fragile. The combined effect of policy uncertainty and hesitant consumers creates a drag that no single policy shift can eliminate. Uncertainty as the New Surcharge Repealed tariffs make headlines — but those headlines rarely reveal the whole picture. For retailers and real estate professionals, the emphasis is less on immediate savings and is more on navigating an uncertain policy environment. Planning and budgeting must account for future volatility in materials, supply chains and project schedules. Until clarity is restored, cost pressures will persist. In today’s climate, uncertainty is the new surcharge. Companies that adapt, build flexible strategies and anticipate policy changes will be best positioned to maintain margins, meet project deadlines and manage risk. Those that ignore volatility may pay a premium, not just in materials but in missed opportunities, delayed projects and operational challenges.
mannpublications.com