Kohl's Corporation (KSS) saw its stock price plummet 5.12% in pre-market trading on Thursday, as investors reacted to President Trump's sweeping new tariff policy dubbed 'Liberation Day'. The move comes as part of a broader selloff in retail stocks, with industry giants like Walmart and Target also experiencing significant drops.

The new tariff plan, announced on Wednesday, imposes a baseline 10% tariff on all US trade partners, with additional tariffs targeting countries considered to be "worst offenders" in trade balance. This policy is set to go into effect on April 5, potentially disrupting global supply chains and increasing costs for retailers who heavily rely on international sourcing.

While Kohl's specific sourcing details were not provided, the impact on the retail sector as a whole is expected to be substantial. Analysts are particularly concerned about the high tariffs imposed on key apparel and footwear sourcing markets in Asia, with China facing a 34% tariff, Vietnam 46%, and Cambodia 49%. These countries are crucial manufacturing hubs for many US retailers, including department store chains like Kohl's.

The uncertainty surrounding the new tariff policy and its potential to drive up costs and reduce profit margins has led to a widespread selloff in retail stocks. As consumers may face higher prices and retailers grapple with increased costs, the full impact of these tariffs on Kohl's and other retailers' bottom lines remains to be seen. Investors will likely be closely watching for any updates or guidance from Kohl's management regarding their strategy to navigate these new trade challenges.