Softer sofas, fewer coat sizes and simpler packaging: tariffs are changing more than just the prices of products

MW Softer sofas, fewer coat sizes and simpler packaging: tariffs are changing more than just the prices of products

By Bill Peters

Companies' efforts to manage higher import costs are reshaping the products Americans see on store shelves

Tariffs have pushed companies to get creative to deal with rising costs.

Softer couch cushions. A smaller selection of jacket sizes. Care Bears and other toys sold without fancy packaging or batteries. These are some of the ways the new tariff regime is reshaping the products Americans see on store shelves.

As the U.S.-led trade war alters the economy, some businesses have been tweaking product designs to manage extra import costs. Those often subtle changes to products' appearance and assortment have arrived alongside broader - and more frequently discussed - plans to raise prices and efforts to shift manufacturing away from high-tariff countries like China.

"People are getting more creative, per se, about what are the mechanisms to navigate tariff increases in this day and age," said Jennifer Diaz, an attorney and the founder of the law firm Diaz Trade Law. Businesses, she said, are asking: "What else can I do?"

It's too early to gauge the broader impact of those changes. Some shoppers might find things different but not necessarily worse.

But these shifts may still come at a cost to consumers and companies in the form of lower-quality products, more limited assortments or items that aren't as attractive to shoppers wandering store aisles. And as consumers become increasingly picky amid a years-long struggle with higher prices, even small alterations to appearance risk adding up to bigger pressures on sales.

Sofa cushions, big-and-tall selections

Lee Mayer, the chief executive of Havenly Brands, a furniture seller and interior design service with manufacturers in parts of Asia, said that as the company leans on Vietnam for production to compensate for increased tariffs on goods from China, one result has been slightly softer cushions on some of its nonpremium sofas.

"When you make foam in Vietnam, it's a softer foam," she said. And for cushions filled with feathers, "the feathers on the bird are different than the feathers on the bird you'd get in China."

"It's a bit of a taste thing, whether or not you like a soft cushion or a firmer cushion," she added later. "So we're just going to let it ride a little bit. But I'd be interested to see how sofas have transitioned that way, just writ large, because everyone's moving to Vietnam."

The company, which has offices in Denver, New York and Dallas and employs several hundred people, has also slimmed down the selection of fabric colors, patterns and textures on some collections being made in a new factory or that have seen a jump in costs. Consumer demand has also factored into decisions to narrow the selection of those materials.

For now, she said, some sofas are just harder to make in Vietnam, where the production infrastructure for some products hasn't yet caught up to China's. Some of Havenly's more popular sofas are still being made in China, but because the costs have run so high, the company has narrowed down the assortment for those items, and they have been largely rotated out of its retail locations, catalogs and photography. Those sofas are still available, but they are more expensive now.

"We've tried to, again, simplify the design and create sort of a different type of product that can be manufactured in Vietnam," she said. "But in terms of choice, I think we've certainly narrowed down a little bit."

She said the company would likely re-engineer a vesper chair that comes ready to assemble in a box so that it was smaller and packaged differently, since they can't find someone in Vietnam who can make it. Fabric with a herringbone pattern requires more skilled and expensive stitchwork and can waste more materials, she said.

Thus, she said, she would probably hold off on launching an item with that pattern. She also said she was still figuring out how to rely a little less on lumber, which faces stiff tariffs, to make furniture.

Michael Rosenberg, chief executive of Hawke & Co, a New York-based company that makes jackets, vests and other clothing items, said they had rethought their big-and-tall selection, which he said was an ancillary business.

"We really shy away from that because of how big the garments are," he said. "There were certain things that we did for efficiencies. We need to be a lot smarter now. So our sizing will go to 2XL instead of 3XL."

Hawke & Co imports products from China, Vietnam and Bangladesh. The company has considered other ways to reduce costs in response to the tariffs, including reducing the number of zip pockets on the inside of a jacket from two to one.

"It's not something any of us really want to do," Rosenberg said. He later added: "Eventually, consumers will have less options."

Larger companies weigh possible changes

Larger companies have also floated possible changes. Columbia Sportswear $(COLM)$ said in May that product redesigns were among the options it was exploring for 2026 to cushion the blow from tariffs.

"We have a team of experts exploring possibilities to mitigate the impact of increased tariffs, including redesign, redevelop, resource and reprice products, among other mitigation factors," Chief Executive Tim Boyle said then.

Walmart $(WMT)$ also said in May that some suppliers had been "shifting materials from tariff-impacted components like aluminum to fiberglass, where there is no tariff."

Walmart did not respond to a request for comment. Columbia did not make executives available for an on-the-record interview.

The actual or potential tweaks to product selection have come after a year in which tariffs - on specific countries that make lots of clothing and toys, as well as on specific items like furniture and lumber - have transformed the way businesses make and ship products. Efforts by suppliers to pass on the cost of those levies through price increases have, at times, led to tough conversations with their retail customers. Shortages, confusion and dread emerged in the run-up to the holidays.

The uncertainty surrounding the future of President Donald Trump's tariff agenda has also made it challenging for businesses to plan. The Trump administration has ramped up and walked back tariffs on certain goods and countries several times since announcing its trade agenda in April. In addition, the Supreme Court is weighing the legality of Trump's use of emergency powers to implement some of the tariffs.

But even if the court rules against the government, the U.S. has other ways to impose tariffs. Some business owners say they need to prepare for more volatility either way.

Businesses tweak packaging

Tariffs have also changed the way products get packaged and how they appear on store shelves.

Boyd Stephenson, the owner of Game Kastle College Park, a game store in College Park, Md., said that often, the first print runs of some card games might arrive in a bigger box with a bolder display. Packaging for repeat runs, he said, is typically less flashy - little more than the cards hanging off a peg on a store shelf.

"I have seen a lot of producers sort of skipping over that first-run step and saying, we're just going to go straight to the second," he said in response to a question from MarketWatch during a recent media call about the impact of tariffs on businesses. "It may not have the shelf presence, while the game has a lot of buzz."

Anne Robinson, the owner of Scottish Gourmet in Greensboro, N.C., said on that call that she had changed a lot of the gift packaging for the cookies, candies, jams and other items she assembles. After the pandemic hit, she said, China largely stopped making the baskets she uses, and much of that production moved to Vietnam. But tariffs on imports from Vietnam are high, too.

"I've basically gone back to having only two baskets left in my line," she said. "Everything else is packed in a box, and those boxes are made custom for me here in America. So that's a major design change for me. But they're beautiful tartan boxes."

Jay Foreman, the founder of Basic Fun, which makes toys like Tonka trucks and Care Bears, said the company had begun offering some of those toys with more stripped-down packaging, or no box at all.

The simpler packaging, he said, can reduce a toy's retail price by as much as $3. He said that the company was also offering items with or without batteries. That latter option takes as much as a dollar off the cost but means the customer would have to pay for batteries themselves.

On the left is the traditional packaging for Care Bears. On the right is packing influenced by costs related to tariffs.

"We are not changing the visual style of fabrication of the product," he said over email. "It's mainly around the size and packaging at this point. But only as an option."

But he said those options were harder for retailers to market effectively. And he said none of the retailers or Basic Fun's other customers had yet confirmed purchases of its lower-cost offerings, as they wait out fluctuations in the trade war and the Supreme Court's ruling.

"The fact the tariffs have come down is giving retailers pause when they consider a deconstruct, as they have to balance 'shelf appeal' against value or cost increases," Foreman said. "We are waiting for news."

Changing packaging can reduce a toy's retail price.

Some, however, said the tariffs had helped them discover ways to be more efficient.

Hawke & Co has figured out how to put 15 pieces into a box, up from 10, Rosenberg said, and to fit more garments into the plastic bags - called polybags - used to ship the items. He said the company used to put plastic hangers in those boxes to be used on retailers' store racks. But those hangers, he said, took up more space inside. Now, he said, retailers add the hangers.

'Tariff engineering'

MW Softer sofas, fewer coat sizes and simpler packaging: tariffs are changing more than just the prices of products

By Bill Peters

Companies' efforts to manage higher import costs are reshaping the products Americans see on store shelves

Tariffs have pushed companies to get creative to deal with rising costs.

Softer couch cushions. A smaller selection of jacket sizes. Care Bears and other toys sold without fancy packaging or batteries. These are some of the ways the new tariff regime is reshaping the products Americans see on store shelves.

As the U.S.-led trade war alters the economy, some businesses have been tweaking product designs to manage extra import costs. Those often subtle changes to products' appearance and assortment have arrived alongside broader - and more frequently discussed - plans to raise prices and efforts to shift manufacturing away from high-tariff countries like China.

"People are getting more creative, per se, about what are the mechanisms to navigate tariff increases in this day and age," said Jennifer Diaz, an attorney and the founder of the law firm Diaz Trade Law. Businesses, she said, are asking: "What else can I do?"

It's too early to gauge the broader impact of those changes. Some shoppers might find things different but not necessarily worse.

But these shifts may still come at a cost to consumers and companies in the form of lower-quality products, more limited assortments or items that aren't as attractive to shoppers wandering store aisles. And as consumers become increasingly picky amid a years-long struggle with higher prices, even small alterations to appearance risk adding up to bigger pressures on sales.

Sofa cushions, big-and-tall selections

Lee Mayer, the chief executive of Havenly Brands, a furniture seller and interior design service with manufacturers in parts of Asia, said that as the company leans on Vietnam for production to compensate for increased tariffs on goods from China, one result has been slightly softer cushions on some of its nonpremium sofas.

"When you make foam in Vietnam, it's a softer foam," she said. And for cushions filled with feathers, "the feathers on the bird are different than the feathers on the bird you'd get in China."

"It's a bit of a taste thing, whether or not you like a soft cushion or a firmer cushion," she added later. "So we're just going to let it ride a little bit. But I'd be interested to see how sofas have transitioned that way, just writ large, because everyone's moving to Vietnam."

The company, which has offices in Denver, New York and Dallas and employs several hundred people, has also slimmed down the selection of fabric colors, patterns and textures on some collections being made in a new factory or that have seen a jump in costs. Consumer demand has also factored into decisions to narrow the selection of those materials.

For now, she said, some sofas are just harder to make in Vietnam, where the production infrastructure for some products hasn't yet caught up to China's. Some of Havenly's more popular sofas are still being made in China, but because the costs have run so high, the company has narrowed down the assortment for those items, and they have been largely rotated out of its retail locations, catalogs and photography. Those sofas are still available, but they are more expensive now.

"We've tried to, again, simplify the design and create sort of a different type of product that can be manufactured in Vietnam," she said. "But in terms of choice, I think we've certainly narrowed down a little bit."

She said the company would likely re-engineer a vesper chair that comes ready to assemble in a box so that it was smaller and packaged differently, since they can't find someone in Vietnam who can make it. Fabric with a herringbone pattern requires more skilled and expensive stitchwork and can waste more materials, she said.

Thus, she said, she would probably hold off on launching an item with that pattern. She also said she was still figuring out how to rely a little less on lumber, which faces stiff tariffs, to make furniture.

Michael Rosenberg, chief executive of Hawke & Co, a New York-based company that makes jackets, vests and other clothing items, said they had rethought their big-and-tall selection, which he said was an ancillary business.

"We really shy away from that because of how big the garments are," he said. "There were certain things that we did for efficiencies. We need to be a lot smarter now. So our sizing will go to 2XL instead of 3XL."

Hawke & Co imports products from China, Vietnam and Bangladesh. The company has considered other ways to reduce costs in response to the tariffs, including reducing the number of zip pockets on the inside of a jacket from two to one.

"It's not something any of us really want to do," Rosenberg said. He later added: "Eventually, consumers will have less options."

Larger companies weigh possible changes

Larger companies have also floated possible changes. Columbia Sportswear (COLM) said in May that product redesigns were among the options it was exploring for 2026 to cushion the blow from tariffs.

"We have a team of experts exploring possibilities to mitigate the impact of increased tariffs, including redesign, redevelop, resource and reprice products, among other mitigation factors," Chief Executive Tim Boyle said then.

Walmart (WMT) also said in May that some suppliers had been "shifting materials from tariff-impacted components like aluminum to fiberglass, where there is no tariff."

Walmart did not respond to a request for comment. Columbia did not make executives available for an on-the-record interview.

The actual or potential tweaks to product selection have come after a year in which tariffs - on specific countries that make lots of clothing and toys, as well as on specific items like furniture and lumber - have transformed the way businesses make and ship products. Efforts by suppliers to pass on the cost of those levies through price increases have, at times, led to tough conversations with their retail customers. Shortages, confusion and dread emerged in the run-up to the holidays.

The uncertainty surrounding the future of President Donald Trump's tariff agenda has also made it challenging for businesses to plan. The Trump administration has ramped up and walked back tariffs on certain goods and countries several times since announcing its trade agenda in April. In addition, the Supreme Court is weighing the legality of Trump's use of emergency powers to implement some of the tariffs.

But even if the court rules against the government, the U.S. has other ways to impose tariffs. Some business owners say they need to prepare for more volatility either way.

Businesses tweak packaging

Tariffs have also changed the way products get packaged and how they appear on store shelves.

Boyd Stephenson, the owner of Game Kastle College Park, a game store in College Park, Md., said that often, the first print runs of some card games might arrive in a bigger box with a bolder display. Packaging for repeat runs, he said, is typically less flashy - little more than the cards hanging off a peg on a store shelf.

"I have seen a lot of producers sort of skipping over that first-run step and saying, we're just going to go straight to the second," he said in response to a question from MarketWatch during a recent media call about the impact of tariffs on businesses. "It may not have the shelf presence, while the game has a lot of buzz."

Anne Robinson, the owner of Scottish Gourmet in Greensboro, N.C., said on that call that she had changed a lot of the gift packaging for the cookies, candies, jams and other items she assembles. After the pandemic hit, she said, China largely stopped making the baskets she uses, and much of that production moved to Vietnam. But tariffs on imports from Vietnam are high, too.

"I've basically gone back to having only two baskets left in my line," she said. "Everything else is packed in a box, and those boxes are made custom for me here in America. So that's a major design change for me. But they're beautiful tartan boxes."

Jay Foreman, the founder of Basic Fun, which makes toys like Tonka trucks and Care Bears, said the company had begun offering some of those toys with more stripped-down packaging, or no box at all.

The simpler packaging, he said, can reduce a toy's retail price by as much as $3. He said that the company was also offering items with or without batteries. That latter option takes as much as a dollar off the cost but means the customer would have to pay for batteries themselves.

On the left is the traditional packaging for Care Bears. On the right is packing influenced by costs related to tariffs.

"We are not changing the visual style of fabrication of the product," he said over email. "It's mainly around the size and packaging at this point. But only as an option."

But he said those options were harder for retailers to market effectively. And he said none of the retailers or Basic Fun's other customers had yet confirmed purchases of its lower-cost offerings, as they wait out fluctuations in the trade war and the Supreme Court's ruling.

"The fact the tariffs have come down is giving retailers pause when they consider a deconstruct, as they have to balance 'shelf appeal' against value or cost increases," Foreman said. "We are waiting for news."

Changing packaging can reduce a toy's retail price.

Some, however, said the tariffs had helped them discover ways to be more efficient.

Hawke & Co has figured out how to put 15 pieces into a box, up from 10, Rosenberg said, and to fit more garments into the plastic bags - called polybags - used to ship the items. He said the company used to put plastic hangers in those boxes to be used on retailers' store racks. But those hangers, he said, took up more space inside. Now, he said, retailers add the hangers.

'Tariff engineering'

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January 08, 2026 10:13 ET (15:13 GMT)

MW Softer sofas, fewer coat sizes and simpler -2-

Then there's "tariff engineering" - the practice of modifying a product's design to get it reclassified and thus pay a lower rate of tariff. That practice is not new, but some companies have recently been weighing it as an option.

For instance, recreational-vehicle maker Winnebago $(WGO)$, in an earnings presentation in March, said it planned to work with "external experts to develop and implement effective mitigation strategies, including tariff engineering and deferrals."

In 2019, Marketplace reported that Columbia Sportswear was making some women's shirts with pockets near or below the waist, which allowed the company to pay lower import taxes than if the items didn't have those pockets. As has been reported elsewhere, Converse All Stars have come with a layer of felt on the bottom to get them classified as slippers rather than shoes, which would help cut the tariff burden.

However, Diaz at Diaz Trade Law said that amid the broader tariff onslaught, she's received a lot more inquiries about shifting production than about tariff engineering.

Redesigning products with the intent of paying lower tariffs also comes with risks. In 2024, Ford $(F)$ agreed to pay the U.S. government $365 million to settle allegations that the carmaker, between 2009 and 2013, tried to dodge higher U.S. duties on cargo vehicles by importing its Transit Connect vans outfitted with what the Justice Department called "sham rear seats and other temporary features to make the vans appear to be passenger vehicles."

Diaz said that case, and U.S. Customs and Border Protection's tougher stance on trade, could make other companies think twice about trying to engineer their way around tariffs.

"I don't feel as confident with tariff engineering as I did pre-Ford, given the heightened risk of CBP enforcement these days, and customs is going at it full guns ablazing right now," she said.

With another holiday season in the rearview mirror, some sounded the alarm about other ways, apart from tariff engineering, that tariffs could influence what products look like.

"You will see a decrease in variety as people consolidate" product lines, said Jared Hendricks, the founder and CEO of Village Lighting, a company based in West Valley City, Utah, that sells holiday lighting and decor.

"You will see a cutting of corners," he continued. "If you had a tree or some garland with 1,000 lights, it might have 800. Things will just get watered down, and so you will be paying the same, if not more, for less."

-Bill Peters

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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January 08, 2026 10:13 ET (15:13 GMT)

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