As retailers gear up for the holidays to make their final revenue push of 2019, many are doing so without the buffer of foreign consumption they can usually count on to offset any slackening of domestic demand. Weaker global growth, little enthusiasm for corporate investment, and trade-related uncertainty have created an economic environment in which retailers’ fates hinge on the willingness and ability of the American consumer to keep spending.

“If we look globally, it’s a big question mark,” said Pam Danziger, president of Unity Marketing. The ongoing political unrest in Hong Kong has had an impact on many luxury brands that rely on the city as a bridge to mainland China, she said. “It’s really taken the wind out of the sails in the Hong Kong market and reversed some fortunes for many of the companies dependent on it,” Danziger said.

In Europe, France’s yellow vest protests could lead to a shift in consumer behavior, she added, and Germany’s export-dependent economy also has suffered in recent quarters due to weak demand.

So far, this has not affected the wealthiest American consumers, Danziger said — but she added there were indications that consumer confidence was reaching a tipping point. “They have plenty of money but there’s an awful lot of concern,” she said. “This impeachment stuff, the concern about the trade wars, the stock market… There’s a tremendous amount of uncertainty among affluent consumers, which may really put the brakes on their spending.”

Retail market observers say the sector should come through the holidays mostly unscathed by the looming prospect of sweeping tariffs on consumer goods — but 2020 is another story.

“Consumers have not stopped shopping because of the tariffs,” said Ryan Giannotto, director of research at GraniteShares.

This could shift if the Dec.15 tariffs on clothing, electronics and other goods goes into effect. Retailers and major consumer brands need the tailwind of strong holiday revenues, because next year could be a very different environment.

“We’ll really start to see this in Q1 2020,” Giannotto said. “Economic theory suggests that the least flexible will suffer the lion’s share of the costs,” he said.

For brand names like Apple, he said, this could mean passing higher prices along to consumers. Makers, distributors and sellers of more commoditized items would likely see their margins suffer.

“We believe the tariffs are taking a bite out of consumer spending,” said Joseph Feldman, senior managing director and assistant director of research retail at the Telsey Advisory Group, noting that stores have had mixed success passing through higher costs. “Some retailers have tried to take prices up and met with some resistance,” he said.

“The tariffs are being paid by American businesses and consumers, and the damage has increased substantially since the first major tranche of tariffs on consumer goods was imposed on Sept. 1,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note. “So far, we can detect no significant pass-through from these tariffs to consumer prices, but it's just a matter of time,” he said.

Camilla Yanushevsky, equity analyst at CFRA Research, said many retailers are trying to avoid tariff cost pressures by stocking up on inventory in advance. “They’ve had to do that for a while now,” she said.

Although this could insulate retailers from a sudden cost increase in the new year, the strategy comes with costs and risks of its own: Companies have to store those goods, paying for both the space and the lost opportunity cost of capital tied up in merchandise, and if buyers err in their estimates of demands or trend patterns, the results could be painful markdowns.

“If something doesn’t sell well, it can really hurt their margins next year,” Yanushevsky said.

“Most of the companies have talked about being able to deal with it for 2019… but nobody really wants to talk about 2020. It’s going to be pressure for sure,” Feldman said. “It’s going to be a big issue for 2020."