Trump tariffs prompt Target, Best Buy to warn shoppers about higher prices
Target and Best Buy warned shoppers to expect higher prices as a result of President Donald Trump’s escalating trade war.
The 25% tariffs on imports from Mexico and Canada took effect Tuesday while import levies on Chinese goods doubled to 20%.
Trump’s tariffs on Mexican goods could drive up seasonal produce prices as soon as this week, Target CEO Brian Cornell warned Tuesday. Shoppers will have to pay more for strawberries, avocados and bananas, he said in a CNBC interview after Target posted fourth-quarter earnings.
Target imports fruit and vegetables from Mexico during the winter.
“Those are categories where we’ll try to protect pricing but the consumer will likely see price increases over the next couple of days,” Cornell said.
Best Buy also warned shoppers could face higher prices. China and Mexico are the top countries for the electronics and appliances it sells.
About 60% of Best Buy’s products, by cost, come from China. Mexico is the second-largest country.
“We’ve never seen this kind of breadth of tariffs. This, of course, impacts the whole industry,” Best Buy CEO Corie Barry said on a fourth-quarter earnings call with analysts Tuesday.
Barry said vendors would pass along the tariff costs to retailers “making price increases for American consumers highly likely.” Shares plunged 13% on the remarks.
Business lobbying groups have warned for months that shoppers could face higher prices as companies pass along the costs of tariffs.
The countries Trump has targeted supply a wide range of goods. In grocery aisles, shoppers could see prices of meat and grains increase. Prices of new cars and trucks, consumer electronics and lumber could also go up.
A Morgan Stanley survey of 2,000 U.S. consumers showed their outlook for the economy and their own household finances deteriorated in February. Only 38% of consumers expect the economy to get better in the next six months, down from 44% last month, and 48% expect the economy to get worse.