Tariff Update: April 18, 2025

As of April 18, 2025, the U.S. has dramatically escalated its trade offensive against China, imposing tariffs as high as 145% on select imports including electric vehicles, semiconductors, steel, and even consumer goods like clothing and beauty products. Beijing wasted no time retaliating, slapping an 84% tariff on U.S. goods starting April 10, intensifying an already tense trade climate.

But that’s not all. In a move that will hit e-commerce giants like Shein and Temu particularly hard, the U.S. will close the de minimis loophole for shipments from China and Hong Kong beginning May 2. This means that packages under $800, previously exempt from import duties, will now face full tariffs, adding a direct cost burden to millions of cross-border shoppers.

While the proposed 20% tariffs on European imports remain on hold, it’s likely that the existing 10% global tariff such as those on aluminum will remain in place. As of now, the EU has yet to match the U.S.’s aggressive tariff hikes, as officials in Brussels review Chinese subsidies and are widely expected to impose new duties on electric vehicles and potentially other strategic
imports in the coming months.

In short: the tariff war isn’t on the horizon. It’s here, it’s global, and it’s escalating quickly. Below, we break down how the latest developments are rippling through key sectors, from mass retail to luxury and beyond.

Hermès has announced it will raise prices in the U.S. starting May 2025 to counteract the potential impact of tariffs imposed by President Donald Trump, shifting the price increases wholly to the consumer. “We are going to fully offset the impact of these new duties by increasing our selling prices in the United States from May 1, across all our business lines,” said Finance Chief Eric du Halgouet during the company’s quarterly earnings call last week.

This move, limited to the U.S. market, follows an earlier 6% price hike earlier in the year. With its strategy of maintaining tight supply and producing well below demand, Hermès remains one of the best-positioned to navigate the tariff turmoil with minimal impact. Still, despite posting solid Q1 sales growth, these fell short of analyst expectations.

LVMH, which reported a soft Q1, is weighing production shifts and pricing adjustments in response to new tariffs, though its strategy remains unclear. The company is also navigating significant changes in creative leadership, compounded by broader headwinds in the global luxury market and tariff uncertainty, creating a perfect storm that may take time to stabilize.

During the company’s annual general meeting this past week, CEO Bernard Arnault urgentl advocated for an EU-US free trade agreement to mitigate the impact on the luxury sector, “ On the tariffs issue, we have to try to settle it amicably, we have to try to discuss with our American friends to find a solution,” Arnault said.

Both retailers are seeing a surge in sales as consumers race to buy before price hikes kick in. According to Bloomberg, Shein’s revenue jumped 29% year-over-year in March, then climbed even higher (up 38%) during the first 11 days of April. Temu, owned by PDD Holdings Inc., saw even stronger momentum, with growth rates of 46% in March and a striking 60% in early April, per Bloomberg Second Measure.

Despite these sales bumps, these retailers’ app downloads are tanking amid growing fears over rising costs and economic instability. Temu, once a fixture in the U.S. Apple Store’s top five, has plunged to 75th place, according to the BBC. Shein isn’t faring much better, now sitting at 58th, down sharply from No. 15 just last month. The tariff shockwaves are already reshaping digital storefronts.

Several brands, in particular smaller enterprises, are announcing price changes in response to the newly imposed tariffs. In fashion, brands like Ana Luisa and Réalisation Par are increasing prices or adjusting shipping and discounts.

U.S. consumer sentiment has plummeted to its lowest point since June 2022, driven by escalating tariffs and mounting recession fears. The University of Michigan’s Consumer Sentiment Index dropped to 50.8 in April, marking a 11% decline from March and the fourth consecutive monthly decrease. This downturn reflects widespread anxiety over inflation, job security, and economic stability, with inflation expectations reaching levels not seen since the early 1980s. Interestingly, U.S. retail spending saw a notable uptick in March 2025, rising by 1.4% month-over-month, which was the largest increase in over two years. This surge was primarily driven by consumers rushing to purchase big-ticket items, especially automobiles, ahead of impending tariffs.

Sold Out Product Counts Non-Discounted Merchandise: Selected US Multi-Brand Retailers

Centric Market Intelligence data shows that categories like dresses, sleepwear, and underwear are among those with the highest sold-out rates in recent weeks, offering a clear signal of where cautious consumers are still choosing to spend.

Zooming out, global consumer sentiment is also showing signs of strain. In Australia, for instance, the Westpac Consumer Sentiment Index fell by 6% in April, reaching a six-month low. This decline is attributed to concerns over the ongoing tariff war and its potential impact on the economy.

These developments underscore the far-reaching effects of trade tensions, influencing consumer confidence and spending behaviors both domestically and internationally.

Continue to watch this space for the latest data and updates.

Centric Software® (centricsoftware.com)

From its headquarters in Silicon Valley, Centric Software provides an innovative and AI-enabled product concept-to-commercialization platform for retailers, brands and manufacturers of all sizes. As experts in fashion, luxury, footwear, outdoor, home, food & beverage, cosmetics & personal care as well as multi-category retail, Centric Software delivers best-of-breed solutions to plan, design, develop, source, comply, buy, make, price, allocate, market, sell and replenish products.

• Centric PLM™, the leading PLM solution for fashion, outdoor, footwear and private label, optimizes product execution from ideation to development, sourcing and manufacture, realizing up to 50% improvement in productivity and a 60% decrease in time to market.
• Centric Planning™ is an innovative, cloud-native, AI solution delivering end-to-end planning capabilities to maximize retail and wholesale business performance, including SKU optimization, resulting in an up to 110% increase in margins.
• Centric Pricing & Inventory™ leverages AI to drive margins and boost revenues by up to 18% via price and inventory optimization from pre-season to in-season to season completion.
• Centric Market Intelligence™ is an AI-driven platform delivering insights into consumer trends, competitor offers and pricing to boost competitivity and get closer to the consumer, with an up to 12% increase in average initial price point.
• Centric Visual Boards™ pivot actionable data in a visual-first orientation to ensure robust, consumer-right assortments and product offers, dramatically decreasing assortment development cycle time.
• Centric PXM™, AI-powered product experience management (PXM) encompasses PIM, DAM, content syndication and digital shelf analytics (DSA) to optimize the product commercialization lifecycle resulting in a transformed brand experience. Increase sales channels, boost sell through and drive margins.

Centric Software’s market-driven solutions have the highest user adoption rate, customer satisfaction rate and fastest time to value in the industry. Centric Software has received multiple industry awards and recognition, appearing regularly in world-leading analyst reports and research.

Centric Software is a subsidiary of Dassault Systèmes (Euronext Paris: #13065, DSY.PA), the world leader in 3D design software, 3D digital mock-up and PLM solutions.

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