A growing number of retail executives are expressing cautious optimism that the Trump administration’s steep proposed tariffs will remain at a manageable 10% rather than climbing higher, according to a new survey by consulting firm AlixPartners.
The survey, conducted June 1, polled executives across brands, retailers, and consumer goods firms. It found that many expect President Donald Trump’s reciprocal tariffs on imports from the European Union, Vietnam, India, and Mexico will not escalate once the current 90-day pause expires in July.
Mexico, while not included in the reciprocal tariff plan, has also faced new duties in recent weeks, which respondents similarly believe will hold steady.
Retail leaders are particularly watching Vietnam, now a key manufacturing hub for many US brands.
Over half (53%) of surveyed executives said they anticipate the tariff on Vietnamese imports will remain at 10%, rather than jumping to the originally feared 46% rate, a move that could significantly impact companies like Nike that rely on Vietnamese suppliers.
Their optimism follows a string of recent developments: the US and China have resumed trade talks, and a court ruling challenged Trump’s authority to impose the April 2 tariffs, though the ruling is currently on hold pending appeal.
These signals have encouraged speculation that some of the most aggressive trade measures might ultimately be rolled back.
AlixPartners’ Sonia Lapinsky said the mood among retailers shifted notably in late May. “We saw a lot of fear early on that tariffs would rise well above 10%,” she told CNBC.
“But the administration’s willingness to negotiate and walk back initial plans has made some executives hopeful the worst may be avoided.”
That dynamic aligns with what some have dubbed the “TACO trade”, short for “Trump Always Chickens Out”, a phrase coined by a Financial Times columnist to describe the pattern of aggressive tariff announcements followed by pullbacks in response to market backlash.
Trump, when asked about the term, rejected the label, calling it “negotiation.”
Still, not all industry insiders are convinced. Lapinsky warned that optimism could be premature, especially for nations without China’s economic leverage.
“We could see China maintain the status quo due to mutual interest in finding a deal,” she said. “But other countries may not be able to secure similar outcomes.”
Retailers, she added, are preparing for both outcomes. For instance, 46% of respondents expect tariffs on Indian imports to stay at 10%, but 29% are hedging their bets by planning for the possibility of higher duties.
The uncertainty reflects a broader reality for the retail industry: while there’s growing confidence that Trump’s tariffs won’t escalate as feared, the unpredictability of trade policy still looms large over global supply chains.
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