Tariffs are on everyone's minds these days. The Trump Administration has made no secret that it is prepared to add more import taxes to goods from trading partners, with China topping the list.  As of June, 2019, the U.S. had slapped tariffs in the billions on Chinese imports; the latest $300 billion in tariffs will have a direct impact on consumer goods. China, in the meantime, has set $110 billion on its own imports, while threatening additional qualitative measures.

The result of these actions has been doom-and-gloom panic, with the media and retailers predicting economic collapse. This concern makes sense; tariffs mean higher import costs; costs that are passed along to consumers. The higher the prices of goods, the lower the demand. This, in turn, could depress consumer spending, meaning fewer sales, job cutbacks and store closures. Given that empty stores aren't optimal for commercial real estate investors, it doesn't take much to understand that tariff increases can be problematic for commercial retail space.

But, connecting tariffs to retail real estate isn't a black-and-white scenario. Economists are careful to point out that it's too early to gauge the direct impact of tariff increases on consumer spending and, by extension, store space. Yes, though the news  continues about retailers shuttering space and closing stores. There are plenty of other factors behind this trend, ranging from over-leveraging to online competition — though a prolonged trade war could exacerbate the already volatile retail scenario.