As global trade tensions ease following China’s rollback of its 125% tariffs, Costco is making a timely financial play. The retail giant has launched a “Buy Now, Pay Later” program with Affirm, allowing online shoppers to finance purchases from $500 to $17,500 over three to 36 months.
The move arrives as the White House warns of growing economic pressure on Beijing, signals that could reshape global supply chains. Costco’s offer isn’t just about convenience; it’s a calculated response to mounting financial uncertainty in an unpredictable trade environment.
With policy shifts rippling across borders, this payment plan hints at more than consumer relief. It points to a broader shift in how major retailers are adapting to global economic disruption.
Costco’s BNPL Initiative: A Timely Financial Strategy
Costco’s collaboration with Affirm to introduce BNPL options isn’t just about offering payment flexibility; it’s a calculated response to shifting consumer behaviors amid economic uncertainties. By allowing members to finance significant online purchases over extended periods, Costco addresses the financial strain many face due to fluctuating trade policies and tariffs.
This initiative coincides with China’s recent tariff concessions, indicating a broader transformation in global trade relations. By proactively adapting to these changes, Costco positions itself to better serve its customers during unpredictable economic times. This approach may set a precedent for other retailers navigating similar challenges.
China’s Tariff Concessions: Implications for Global Retail
China’s decision to ease its 125% tariffs marks a significant shift in its trade strategy, reflecting internal economic pressures and the need to stabilize its manufacturing sector. This move has direct implications for global retailers like Costco, which rely on international supply chains. With the easing of tariffs, retailers may experience changes in product pricing and availability, necessitating adjustments in sourcing and pricing strategies.
Costco’s BNPL program can be seen as a proactive measure to cushion consumers from potential price volatility resulting from these global trade adjustments. As trade dynamics continue to evolve, retailers must remain agile in their financial offerings.
US-China Trade Agreement: A Temporary Respite
The May 12, 2025, US-China trade agreement, which temporarily reduced mutual tariffs, offers a brief window of relief for global markets. For retailers like Costco, this period is an opportunity to reassess supply chains and pricing models.
However, the agreement’s 90-day duration underscores its temporary nature, urging businesses to prepare for potential reinstatements of tariffs. Costco’s BNPL initiative serves as a buffer, providing consumers with financial flexibility amid these uncertainties. By anticipating the short-lived nature of trade agreements, retailers can better equip themselves and their customers for the ebbs and flows of international trade relations.
BNPL’s Rise Amid Economic Tensions
The BNPL sector has witnessed significant growth, reaching $560.1 billion globally in 2025, a 13.7% increase from the previous year. This surge is partly attributed to economic uncertainties stemming from trade tensions, prompting consumers to seek flexible payment options. BNPL services offer a sense of financial control, especially when future pricing remains unpredictable.
Costco’s entry into the BNPL space reflects an understanding of this consumer sentiment, providing tools to manage large purchases without immediate financial strain. As economic landscapes fluctuate, BNPL’s role in offering financial stability becomes increasingly prominent.
Who’s Really Using BNPL? The Data Paints a Clear Picture
A closer look at Buy Now, Pay Later trends reveals a telling pattern: the majority of users are financially vulnerable households feeling the pinch from trade-driven price hikes. More than 40% made late payments in the past year, and usage is highest among those earning between $20,001 and $50,000 annually. That group is often hit hardest by rising costs tied to tariffs. Affirm, Costco’s BNPL partner, reports an average balance of $736 and a delinquency rate of 2.4%.
These figures point to a growing reliance on installment plans as families try to stretch limited budgets, especially as trade policies continue to upend supply chains and pricing stability. Next, we look at how Costco timed its response.
Costco’s Timing Isn’t Coincidence—It’s Supply Chain Strategy
Costco’s rollout of Buy Now, Pay Later closely mirrors China’s recent economic retreat. As Beijing quietly exempts key U.S. goods from steep tariffs and struggles with internal financial strain, supply chains are undergoing rapid recalibration. Pat Suh, Affirm’s SVP of Revenue, remarked, “As summer approaches, we’re seeing more consumers turn to Affirm to prepare for the season ahead.”
That seasonal spike aligns with the 90-day tariff rollback, hinting that retailers anticipated the shift and acted early. Costco’s move wasn’t just about offering payment plans, it was a calculated strategy to help consumers navigate volatile pricing during a period of trade-driven uncertainty.
Up next: how the White House’s trade posture is reshaping retail behavior.
White House Trade Pressure Pushes Retailers to Rethink Strategy
White House press secretary Karoline Leavitt recently stated, “the president’s message has been simple and consistent from the beginning to countries around the world; bring us your best offers.” That message appears to be yielding results. China’s quiet concessions suggest the administration’s tariff-heavy strategy is shifting global economic behavior.
Retailers like Costco aren’t just offering flexible payments, they’re proactively adapting to a trade environment shaped by U.S. leverage. Costco’s BNPL rollout reflects a larger shift: American businesses responding not just to consumer needs, but to policy-driven market changes. Now, let’s look at how BNPL’s expansion may reflect long-term expectations about trade instability.
Installment Plans Offer a Glimpse Into Trade’s Uncertain Future
The U.S. Buy Now, Pay Later market is on track to reach $184.05 billion by 2030, up from $109 billion in 2024. That growth reflects more than consumer demand, it signals mounting expectations that trade instability is here to stay.
Costco’s BNPL launch isn’t just keeping pace with trends. It’s preparing for a future where flexible payment tools will be vital as supply chains continue to shift. Despite the temporary 90-day tariff relief, retailers and lenders alike are planning for a bumpy road ahead. As price volatility lingers, installment options may become standard.
Let’s close by examining what all this says about the future of retail and global trade.
A New Consumer Economy Takes Shape Amid Global Trade Shifts
Costco’s Buy Now, Pay Later rollout isn’t just a financial convenience, it reflects a broader transformation in the retail landscape. As China faces mounting pressure and its export-reliant economy falters, U.S. retailers are responding with tools that bolster consumer adaptability. “The country faces a decline in its export-driven model” is more than a policy footnote, it’s the backdrop to a retail evolution.
Costco’s collaboration with Affirm signals the emergence of a new financial ecosystem built for a world where global trade dynamics are no longer stable or predictable. As geopolitical strategies reshape commerce, retailers are quietly rewriting the rules of consumer finance to match a new global reality.
Navigating the New Economic Terrain
Costco’s new financial program and China’s quiet economic concessions together mark more than a policy shift—they reveal a deeper global realignment. The 90-day tariff reduction offers only a brief pause in what now looks like a lasting transformation in U.S.-China trade. By enabling purchases up to $17,500 to be paid over time, Costco acknowledges that consumers increasingly need support navigating volatile pricing.
Meanwhile, China’s subtle exemptions on key U.S. goods; despite its public defiance, signal economic strain that White House officials have long forecasted. As the geopolitical balance tilts, Costco’s financial strategy showcases how American retailers are not just adjusting, but actively positioning for advantage in this new, uncertain era.
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