Despite the phase one trade deal with China, many U.S. consumers are starting to feel the effect of higher tariffs. That’s according to the new CEO of the American Apparel & Footwear Association (AAFA), Steve Lamar, who joined Yahoo Finance’s “On the Move” to discuss how tariffs are affecting the retail industry.

“Those products for where the tariffs had been in place for 14 or 15 months — handbags, backpacks —we’re already seeing price increases that they’re up about 7-7.5%. Those had been in place in September of 2018 first at 10% and now at 25%,” said Lamar.

As part of Phase 1 deal, the U.S. has agreed to ease off some of the tariffs put in place in 2019. This includes the 15% tariffs on $112 billion worth of Chinese goods on September 1, which has been cut to 7.5%.

Lamar also noted that many consumers don’t realize how much tariffs affect the prices of their purchases.

“What a lot of people don’t realize is the tariffs are at 25% for those products. Your hats, your bags, your gloves, the phase one deal doesn’t do anything to ease those tariffs; those are in place. They’re going to be there for a while.”

When asked if retailers are passing on those increases to customers or eating the costs, Lamar said that companies are reluctant to pass the increase on to customers in order to stay competitive.

“Everyone’s trying to figure out what’s the best way to mitigate it, but over the long term, the tariffs make their way into the prices. We know that because the tariffs that were imposed on us in 1930 and are still with us — Those are now baked into all the products.”

Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.

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