WASHINGTON, D.C.: President Donald Trump's tariff policy is now taking effect, and many companies are signaling who will absorb the cost: everyday American shoppers.

Retailers and consumer goods makers had long warned that new import levies would squeeze margins and force tough decisions. For many, that moment has arrived. Some firms are bracing for lower earnings, while others are choosing to pass higher costs directly to consumers, and in several cases, both.

Procter & Gamble warned of a challenging 2025 outlook and informed major retailers like Walmart that price hikes on U.S. goods would begin next week. The company said it would raise prices on roughly a quarter of its U.S. product range, including everyday staples like Bounty paper towels and Tide detergent. A spokesperson confirmed that increases would be in the mid-single-digit range across categories.

The pressure isn't limited to P&G. Since Trump's April 2 "Liberation Day" tariff announcement, consumer goods companies have taken a hit: P&G shares are down 19 percent, Nestlé has fallen 20 percent, Kimberly-Clark is off 11 percent, and PepsiCo has declined nearly seven percent — even as the S&P 500 has climbed over 13 percent.

Many brands are grappling with lukewarm post-pandemic sales as consumers grow more selective about spending on premium products. Nestlé noted last week that North American shoppers remain hesitant to pay higher prices at checkout.

This environment of tighter wallets and rising input costs is fueling investor concerns. "You're going to see companies like Walmart, Amazon, and Best Buy forced to pass price increases to consumers," said Bill George, former Medtronic CEO and fellow at Harvard Business School. "Main Street has yet to see the fallout from increased tariffs — and they're going to go higher."

Between July 16 and 25, companies tracked by Reuters estimated they could lose between US$7.1 billion and $8.3 billion in total this year due to tariffs. Automakers like GM and Ford have so far absorbed billions in extra costs but may not be able to continue doing so indefinitely.

Some firms prepared by stockpiling goods ahead of the tariff deadline. Analysts say that this may have delayed price hikes and prevented tariffs from immediately reflecting in inflation data. But once inventories thin, the cost impact is likely to show up — perhaps as soon as the fourth quarter.

Luxury brands have moved more quickly. EssilorLuxottica, which makes Ray-Ban sunglasses, and Swatch, the Swiss watchmaker, have already raised prices. Swatch CEO Nick Hayek noted the company increased prices by about five percent with "zero impact" on sales. He added that high-end customers may simply shift purchases to overseas markets with lower taxes.

"You cannot do this with cars. You cannot do this with machines. But you can do this with watches. So it's not so problematic for us," Hayek said.