Former Sears CEO Critiques Corporate Silence on Trump Tariffs

Mark Cohen, the former CEO of Sears Canada and current director of the retail studies program at Columbia Business School, has expressed grave concerns regarding the impact of President Donald Trump’s tariffs on corporate America. He argues that fear of retaliation has silenced many CEOs in the retail sector, leading to what he describes as a form of “cowardice.” According to Cohen, the escalating trade war is causing significant upheaval across supply chains and threatening the economic stability of many businesses.

Cohen shared these insights in an interview with Fortune, explaining that many industry leaders are hesitant to speak out against tariffs, fearing backlash from the administration. “Few in industry are speaking out loud about this, for fear of retaliation,” he stated. Retailers are reportedly struggling to adjust their forecasts and protect their profit margins, with some even reaching out to Cohen in panic as they attempt to navigate these challenging conditions.

As the holiday season approaches, Cohen warns that the situation is becoming increasingly dire. He noted that while retailers initially managed to stockpile goods and maintain low prices during the spring and summer, the impending holiday inventory will now be affected by tariffs. “The party is over now,” Cohen stated, indicating that consumers will soon feel the impact of these additional costs.

Retail giants like Walmart may be better positioned to absorb some of the financial strain, but for smaller manufacturers and retailers, the situation is critical. Cohen likened their struggles to a “deadly COVID-19-like crisis,” emphasizing that the pressures from tariffs could lead to severe consequences for many businesses.

He elaborated on the nature of tariffs, describing them as a hidden “time-bomb” within the U.S. economy. Unlike traditional taxes that are applied at the point of sale, tariffs increase costs long before products reach store shelves. “Almost everything we consume is being burdened with these tariffs,” Cohen explained. The burden of tariff payments is weighing heavily on smaller importers, many of whom are now facing liquidity crises.

Even larger retailers are not immune to these pressures. For instance, IKEA recently raised prices on a bedroom set by $90 within two months, a move that reflects the widespread impact of tariffs. Cohen pointed out that price increases from companies like IKEA—typically known for low-cost offerings—signal the extensive reach of tariff-related costs across the retail landscape. “There’s no one who can shelter from this,” he remarked.

Recent data from Bank of America indicates that consumers have so far absorbed some of these price hikes, with spending rising by 0.6% year-over-year in September. However, the financial toll on companies is significant. The S&P has reported a projected increase of at least $1.2 trillion in costs this year due to tariffs, with large retailers facing a disproportionate burden of $907 billion. Of this amount, approximately two-thirds is expected to be passed on to consumers through higher prices.

Cohen believes that CEOs from major retailers should take a more active stance against tariffs, advocating for their industry and lobbying the White House for change. He expressed his own willingness to confront these issues head-on, stating, “I would be very actively engaged in efforts to stop this train.” He cautioned that the continuation of these tariff policies could lead to a deep recession, particularly as global partners prepare their own retaliatory measures.

The former CEO underscored the urgency of the situation, noting how rising prices could suppress consumer demand and lead to reduced orders during the holiday season. This, in turn, may result in layoffs and a further economic slowdown, echoing past crises.

Cohen voiced concern over the silence from the business community, speculating that some executives might be lobbying privately but asserting that this approach is ineffective. He emphasized the need for transparency and action, using IKEA as a potential warning sign for broader economic troubles. “IKEA may very well be the canary in the coal mine,” he concluded.

The implications of these tariffs are complex and far-reaching, affecting not only corporate profits but also the daily lives of consumers across the United States and beyond.