“Few in industry are speaking out loud about [this], for fear of retaliation, which is a form of cowardice,” Cohen, who also retired as the director of the retail studies program at Columbia Business School, told Fortune. “They are frantically trying to figure this out,” he said, describing retailers and manufacturers calling him panicking under the pressure to rewrite forecasts, protect margins and renegotiate with suppliers.

So far, retailers have been buoyed by their efforts in the spring and summer to stockpile and reduce the quality of some of their goods, allowing them to keep prices low. That’s why the back-to-school season was good for sellers, he said.

“The party is over now,” Cohen said. “The goods you see on a shelf in advance of this holiday season will have been fully burdened by tariffs.”

Some of the behemoths, like Walmart, will be able to keep their shelves full and prices low, he added. But for small-to-medium manufacturers and retailers, “this is a deadly COVID-19-like-crisis.” 

“I don’t want to sound alarmist here,” Cohen said, “but the sum total of what Trump is up to is catastrophe personified.”

Tariffs are ripping through supply chains, forcing price hikes and crushing businesses

Cohen argued tariffs have become a hidden time-bomb lodged inside the U.S. economy, delayed in its impact by Trump’s deal-making and wishy-washiness on some of his Liberation Day tariffs.

Unlike traditional taxes, which are paid at point of sale, tariffs hit long before a product ever reaches a shelf. 

“Almost everything we consume… is being burdened with these taxes, with these tariffs that he’s created,” he said. “What Trump has done is created a burden on every element in the supply chain.”

Companies also must now front tariff payments before goods clear customs; a shift, he said, that has already triggered a liquidity crisis across “tens of thousands” of smaller importers.

“It’s not been part of their financing structure to be able to support this incremental, sudden, inflated cost of doing business,” Cohen said.

Even large value retailers are buckling now. For example, IKEA’s tradition of keeping prices low has recently come to an end: one bedroom set jumped $90 in two months, according to the Wall Street Journal. Cohen explained that for a value retailer like IKEA, which relies on a demographic of younger people and lower-income consumers, the last thing it wants to do is raise prices and hurt its brand reputation. If IKEA is raising prices, Cohen added, it’s a signal that tariffs are affecting everyone.

“There’s no one who can shelter from this,” Cohen said. 

So far, consumers have been accepting the tariffs in a stride, with Bank of America estimating that consumers spent 0.6% more year-over-year in September. However, the S&P reported last week that companies will incur at least $1.2 trillion more costs this year than expected due to tariffs, and that large retailers will take the largest hit at $907 billion. Of that $907 billion, roughly two-thirds of the impact of tariffs, or $592 billion, is being passed to consumers in the form of higher prices. 

Corporate “cowardice”

Cohen thinks CEOs of these large retailers should be stepping in to defend the broader retail industry from the tariffs, and go to the White House to lobby against them. If he were still the CEO of Sears Canada, he said, he wouldn’t be a “coward,” and would be attaching incremental price increases to his price tags so that consumers could see the rising costs were coming from tariffs. 

“I would be very actively engaged in efforts to stop this train, because the notion of this going on for the next three and a half years brokers the possibility of a deep recession here,” Cohen said.  “Especially since the world is eminently ready to retaliate.” 

Cohen argued the U.S. is now locked in a retaliatory spiral. He pointed to China restricting rare-earth minerals, Canada responding to timber and auto tariffs, and European partners now preparing countermeasures that will likely increase costs for U.S. manufacturers. Trump wakes up everyday with a “new fight on his hands,” driving the industry “nuts” since they can’t plan inventory or pricing.

With rising prices suppressing demand, Cohen said many businesses will choose to slash orders in the upcoming holiday season, triggering layoffs and accelerating economic slowdown.

He believes the perfect storm of inflation, supply chain disruption, recent labor shocks from the deportations of undocumented labor, and political retaliation is pushing the U.S. toward another economic crisis.

“Americans are going to get slammed,” he said, noting that 70% of Americans already live paycheck to paycheck. 

But what alarms him most is the silence from the business community. He thinks maybe chief executives are “privately” lobbying Trump, but sees that strategy as a dead end. 

“IKEA may very well be the canary in the coal mine.”