Holiday decorations could be more expensive than usual this season because of recent tariffs imposed by the Trump administration.
Henry Aigbedo is a Professor of Operations and Supply Chain Management at Oakland University's School of Business. He said that the tariffs placed on U.S trading partners like China, Mexico, and the European Union will raise prices on goods, particularly those imported from abroad. Aigbedo estimates that prices will rise anywhere between 5 to 15%.
He added that some businesses may choose not to order goods they would usually sell because of the extra challenge the tariffs pose.
“That reduces the amount that they have, and when you have a little amount with high demand, that tends to push prices up,” Aigbedo said.
But Aigbedo added that businesses have to make sure they don’t raise prices too high or otherwise customers won’t purchase their products.
“It’s a very complex dynamic,” he said.
Aigbedo emphasized that the supply chain is global, and as much as other countries need the U.S., we also depend on other countries.
“It’s a two-way street,” he said. “The challenge with this is that when you impose tariffs on other countries, some are willing to walk with you, but there are other countries that retaliate by imposing sanctions on things we send to them.”
This can cause U.S. businesses and farmers to suffer, he said.
Up to 80% of holiday decorations, like trees and other ornaments, are manufactured in China, said Aigbedo. The current tension between the United States and China has impacted the cost of importing these goods, and many companies have been shifting production from China, Aigbedo said.
President Donald Trump recently met with the Chinese President Xi Jinping to discuss relations between the two countries. Aigbedo said he is optimistic that meeting could help alleviate tensions.
Aigbedo said that big corporations are able to manage risks better than small businesses because they are diversified.
“Even if there is a problem in one area, they can rely on other product lines,” he said.
The tariffs have the potential to affect consumers, depending on their circumstances, Aigbedo continued.
“Different families have different situations, and it really depends on how important that family thinks an item is,” he said.
“For some people, Christmas is a tradition they have kept for a very long time. Kids are expecting that presents are going to be around the Christmas tree, and parents don’t want to disappoint their kids because things are too expensive," he said.
Aigbedo added that things can be a little bit hard to keep track of, making it difficult for companies to plan ahead.
“These policies change day to day because President Trump comes up with new tariffs on different countries,” he said.
