Business
Retail industry says Trump tariff reversal is a win, even as uncertainty remains
The retail industry on Friday said the Supreme Court’s ruling that struck down some of President Donald Trump’s global tariffs would usher in more predictability and free up businesses from the burden of higher import costs.
“The Supreme Court’s announcement today regarding tariffs provides much-needed certainty for U.S. businesses and manufacturers, enabling global supply chains to operate without ambiguity,” the National Retail Federation said in a statement following the ruling. “Clear and consistent trade policy is essential for economic growth, creating jobs and opportunities for American families.”
The nation’s highest court determined that Trump’s broad tariff rates on U.S. trade partners enacted under the International Emergency Economic Powers Act, or IEEPA, overstepped the president’s authority. The Supreme Court is sending the case back to the lower court for dismissal.
Yet the reversal has raised fresh questions about whether retailers and U.S. consumers will meaningfully feel a financial impact and if the decision means more uncertainty or less.
Just hours after the ruling was handed down, Trump condemned the ruling and said his administration has “alternatives,” referencing sector-specific tariffs and announcing a new, global tariff rate of 10%.
It’s also unclear if, when and how the government may refund tariffs that have already been paid and were deemed unconstitutional.
“We urge the lower court to ensure a seamless process to refund the tariffs to U.S. importers,” the NRF said in its statement. “The refunds will serve as an economic boost and allow companies to reinvest in their operations, their employees and their customers.”
The NRF represents a number of U.S. retailers, from big-box retailers such as Walmart to smaller brands and manufacturers.
In an interview with CNBC on Friday afternoon, David French, executive vice president of government relations for NRF, acknowledged that retailers continue to face other tariffs and may face new ones, based on Trump’s remarks.
“The president has lots of other tariff tools in the toolbox ,and we certainly expect he will use these tools to advance his tariff agenda and maintain leverage in negotiations with other countries,” he said. “The good thing about the ruling today is it takes one of the tools away from him and will build a little bit more of certainty into the tariff process.”
Compared with Trump’s broad use of IEEPA, alternative tariffs that the president imposed on Friday “have inherit limitations,” French said. Some of those tariffs would come with time limits or require the administration to clear additional hurdles.
And, he said, if companies get a refund of tariffs they paid, they could put it toward investing in their businesses, hiring more workers or lowering prices.
He said the trade group is “hopeful the president comes to the conclusion that getting the refunds out as quickly and as simply as possible would be in everybody’s best interest” — noting it could also help Trump ahead of the midterm elections.
In December, warehouse club Costco sued the Trump administration to get a full refund of the tariffs it had paid and to block import duties from continuing.
In the lawsuit, filed in the U.S. Court of International Trade, Costco said it risked losing money it has already paid even if the Supreme Court ruled against the tariffs.
Costco did not respond to a request for comment about the Supreme Court decision and what it means for the retailer’s lawsuit.
While Friday’s ruling is largely positive for the retail industry, the idea that it brings more predictability and lower costs is likely “a pipe dream,” said Steven Shemesh, a retail analyst for RBC Capital Markets.
“This administration is pretty adamant about tariffs and trade balance, and if it doesn’t come this way, I’m pretty certain it will come in another way,” he said prior to Trump’s announcement of new tariffs. “It may have another look, shape, size, smell, but I think it will end up looking similar.”
Apparel and footwear
Clothing, footwear and discretionary items were among the imports most vulnerable to Trump’s tariffs, which imposed steep rates on countries such as China and Vietnam, where the retail industry maintains large portions of its supply chain.
Footwear has been one of the most heavily affected industries, since nearly 100% of all footwear sold in the U.S. is imported, according to Footwear Distributors and Retailers of America, the industry’s trade group.
Even before Trump’s first term, footwear manufacturers were moving some sourcing out of China as its labor force shrank, said Matt Priest, CEO of the FDRA. Yet it would be unrealistic to return production to the U.S., he said, and moving it to another part of Asia can be difficult.
In an interview with CNBC on Friday, Priest said the decision is a step toward more predictability for the footwear industry because it limits tariffs that Trump can use to ones that “are not as sweeping” and may require Congress’ input.
“Even if it’s still uncertain to some degree, we are not on that playing field where we have those exorbitant tariffs,” he said.
The trade group, which includes well-known footwear companies and brands such as Nike, Crocs and Puma, held an emergency videoconference with 325 companies Friday afternoon. Priest said trade group members were upbeat but also had a lot of questions. Among them, members asked about when or if they would get refunds and when the IEEPA tariffs would officially be stopped, specifically whether they would still hit shipments that arrive in the coming days.
Priest said he doesn’t anticipate that refunds will come quickly and that the trade group has coached members against banking on them. He said the group’s work continues, as it tries to work with the Trump administration and Congress to nudge them toward “a more surgical, thoughtful approach” to tariffs.
On the call with trade group members, Priest said, “There was optimism that this part of this journey was at least somewhat being redirected,” and he described the ruling as “a win” for the industry.
But, he added, without the refund and other details spelled out yet, “it’s a long way to go.”
People gather at the Magic Kingdom theme park before the “Festival of Fantasy” parade at Walt Disney World in Orlando, Florida, U.S. July 30, 2022.
Octavio Jones | Reuters
Disney is planning to begin its next phase of cost cutting, which will include as many as 1,000 layoffs, according to a person familiar with the matter.
The cost-cutting initiative comes shortly after Josh D’Amaro took the helm as CEO in mid-March.
The layoffs are expected to mostly affect Disney’s marketing department, according to the person, who requested to speak anonymously because the moves had not yet been made public. That department was recently consolidated under Asad Ayaz, who was named chief marketing and brand officer in January.
Ayaz, who reports directly to D’Amaro and Dana Walden, Disney’s president and chief creative officer, oversees marketing for all of Disney’s divisions — entertainment, experiences and sports — in the newly created role. It’s the first time that Disney brought all of its units under one marketing chief.
Disney’s stock was slightly down in afternoon trading on Thursday. The layoffs were first reported by The Wall Street Journal.
The changes to the marketing department structure occurred in January, when Bob Iger was still CEO of the company. Disney announced shortly after that that D’Amaro would take take over the top job — a long-awaited decision for the company.
D’Amaro, who previously was chairman of Disney Experiences, succeeded Iger after a period of uncertainty for the media and theme park giant — which had included a succession race and recent reorganization and turnaround of the business.
Iger reclaimed the Disney CEO role in late 2022, about two years after his initial departure. He was immediately tasked with a turnaround of the business as its stock price had fallen and earnings began to miss expectations.
By February 2023, Disney had announced sweeping plans that reorganized the structure of the company, cut $5.5 billion in costs and eliminated 7,000 jobs from its workforce.
On D’Amaro’s first official day as CEO in March, he noted the work Iger had done to get the company past one of its most difficult periods.
“When Bob returned to the company a few years ago, his goal was to fortify our business and lay the groundwork for long-term growth, by reigniting creativity and improving performance at our studios, building a robust and profitable streaming business, transforming ESPN for a digital future, and turbocharging our parks and experiences,” D’Amaro said on stage at the company’s investor day.
“We’ve accomplished all of those things, and we’re operating from a place of strength, with ample opportunity for growth.”
Loan default rates are rising, but the true impact on households is yet to come as consumers brace for price rises due to the Iran war, experts have warned.
The latest Credit Conditions Survey from the Bank of England, which measures demand for new borrowing, shows defaults on loans from January to March have risen to 6.2 per cent.
In the previous quarter, there were hardly any defaults on mortgage debt, say lenders. The figures suggest consumers were already feeling the squeeze even before the Iran war, as the economy flatlined.
Karim Haji, Global and UK Head of Financial Services at accountancy firm KPMG, said: “Rising default rates show that underlying pressure is building. The impact of the prolonged conflict on fuel prices is adding new pressure on household finances, and the full impact of higher costs and mortgage rates is still feeding through.”
But the mortgage and property market is still expected to see rising demand in the coming months, experts say.
For secured lending defaults, which include mortgages, the Bank recorded 6.2 per cent in the first quarter of 2026, the highest since the last three months of 2024 (7.8 per cent), when the UK had seen multiple hikes in interest rates. The data for the first three months of 2026 marked a reversal from the fall in defaults reported in the last six months of 2025.
For unsecured lending defaults, such as credit cards, the Bank reported a fourth consecutive quarter of rising defaults (18.6 per cent in the first quarter of 2026). This was the highest figure since the last quarter of 2023 (25.7 per cent).
According to the Bank, demand for home loans and other debt remained high in the run-up to the Iran war, as borrowing costs fell.
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Lenders had expected demand to keep growing as interest rates came down, but that may now have changed as borrowers become less optimistic, or have to refinance mortgages at higher rates as fixed-rate deals came to a close.
Mr Haji added: “Stable demand for unsecured lending shows households turning to credit to manage their increasing day-to-day spend. While some borrowers are still able to access credit, others are beginning to struggle with repayments, pointing to possible early stages of credit deterioration.”
Bond yields, the amount the government pays in interest on its borrowing, which link to mortgage prices, have eased this week following the announcement of a ceasefire.
Aside from credit wobbles, the Bank of England’s Credit Conditions Survey finds that lenders expect mortgage demand to increase over the coming months.
Damien Burke, Head of Regulatory Practice at consultancy Broadstone, said: “The latest Credit Conditions Survey suggests a cautiously improving outlook for the mortgage market at the start of the year, with lenders expecting demand to pick up in the coming months, particularly for house purchases and remortgaging. This reflects a degree of pent-up demand as home buyers awaited lower interest rates and a more certain fiscal landscape.”
But the survey was done just as the Middle East conflict began. The longer it continues, the worse the blow to borrower and lenders, brokers warn.
Raj Abrol, CEO of risk platform Galytix, said: “What started as a conflict in the Middle East is now showing up in borrowing costs right across the economy. Mortgage rates have jumped from 4.8 per cent to over 5.5 per cent — that’s an extra £1,000 a year on a typical £200,000 mortgage. The ongoing turmoil of the Iran crisis has spooked many of the big banks, leading to a surge in mortgage rates and increased pressure on homeowners. Against this complex backdrop, a rise in defaults could well continue for many months as inflation persists and cost-of-living crisis worsens. The longer this uncertainty continues, lenders will continue to remain risk-averse, making access to credit a bigger challenge for consumers.”
For companies, the cost of short-term borrowing has also jumped. When credit gets more expensive, it hurts businesses’ funding for payroll, small and medium-sized businesses refinance, and consumers whose credit cards and car loans quietly reset higher. With a million fixed-rate mortgage deals expiring by September and inflation heading towards 3.5 per cent, the longer this goes on, the more defaults move from a slow creep to something banks have to take seriously, risk experts warn.
Mr Burke adds: “The fall-out from the Ukraine conflict on inflation and mortgage rates remains fresh in the minds of households, and even short-term disruption to supply chains can have a long-term impact on the cost of goods. This further amplifies the need for understanding consumers’ individual affordability when assessing for credit products.”
Russia will see revenue from its biggest single oil tax double to $9 billion in April due to the oil and gas crisis triggered by the US and Israeli attack on Iran, Reuters calculations showed on Thursday.
The Reuters calculation is some of the first concrete evidence of a windfall for Russia, the world’s second-largest oil exporter, from the Iran war, which oil traders say has triggered the most serious energy crisis in recent history.
Iran effectively shut the Strait of Hormuz — a route for about a fifth of global oil and LNG flows — after US and Israeli airstrikes on Iran at the end of February, sending Brent futures shooting well past $100 per barrel.
Russia’s main revenue from its vast oil and gas industry is based on production. Export duty on crude oil has been nullified from the start of 2024 as part of the so-called wider tax manoeuvre, a years-long tax reform of the industry.
According to Reuters calculations based on preliminary production data and oil prices, Russia’s mineral extraction tax on oil output will increase in April to around ₽700 billion ($9 billion) from ₽327 billion in March. The revenue is up by some 10% from April last year.
For the whole of 2026, Russia has budgeted for ₽7.9 trillion from the mineral extraction tax.
Russian energy in demand
The average price of Russia’s Urals crude, used for taxation, jumped to $77 per barrel in March, its highest since October 2023, according to economy ministry data.
That was up 73% from February’s $44.59 per barrel and above the level of $59 assumed in this year’s state budget.
The Kremlin said on Tuesday there were a huge number of requests for Russian energy from a range of different places amid a grave global energy crisis that was shaking the foundations of the oil and gas markets.
Still, there are limits on the windfall for Russia, and economists inside Russia have repeatedly cautioned that 2026 could be a tough year.
Russia ran a budget deficit of ₽4.58 trillion, or 1.9% of gross domestic product, in January-March 2026, the finance ministry said on Wednesday.
And Ukraine’s attacks on Russian energy infrastructure, with an aim to cripple Moscow’s finances, have also contributed to lower earnings and threaten oil production cuts.
The size of the windfall for Russia will ultimately depend on how long the Iran crisis lasts.
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