Costco executives have sounded the alarm about the potential impact of President-elect Donald Trump's proposed tariffs, warning that product prices would rise across the board.
“When it rains, it rains for everyone,” Gary Millerchip, chief financial officer of the $447 billion retailer, told investors on an earnings call Thursday.
“Of course, tariffs increase costs, which we generally don't see as a positive thing.”
The company's chief financial officer said it was unclear how President Trump's planned tariffs would affect the “timing and extent of changes” at Costco and other retailers.
Mr. Millerchip's comment is, Fortune magazine reported this over the weekend.
Trump transition officials dismissed Millerchip's concerns.
“President Trump has committed to a tariff policy that protects American manufacturers and working men and women from the unfair practices of foreign companies and foreign markets,” Trump transition spokesman Brian Hughes told the Post on Monday.
“As he did in his first term, he will implement economic and trade policies that make life more affordable and more prosperous in our country.”
President Trump has announced plans to impose tariffs on imports from several countries after taking office on January 20, including a 25% tariff on all goods imported into the United States from Mexico and Canada. It also includes plans to impose
Canadian authorities have threatened to retaliate by banning imports of American alcohol and cutting off power to millions of American homes.
President Trump also said he wants to impose an additional 10% tariff on all products from China on top of existing tariffs.
Tariffs are implemented by executive order and do not require Congressional approval.
President Trump has called on countries to step up efforts to crack down on the influx of illegal immigrants into the United States and the rise in drug trafficking, which he blames for increased use of fentanyl by Americans.
Caroline Levitt, a spokeswoman for Trump's transition team, said the then-President's tariffs on China during his first term “created jobs, stimulated investment and did not cause inflation.”
“President Trump will put American workers first by restoring American jobs, lowering inflation, raising real wages, cutting taxes, reducing regulation, and untying American energy.” We will work quickly to repair and recover our economy,” Levitt told the Post.
Costco on Thursday beat expectations for first-quarter sales and profit, as a large selection of products and discounted items appealing to budget-conscious U.S. shoppers drove early holiday sales growth at the members-only retailer. .
The company's shares, up 51% since the beginning of the year, rose nearly 2% in Monday trading.
“Seasonal sell-offs seem to be very strong…People are buying very basics this year, which is a good trend,” Millerchip said.
Costco held pre-Black Friday sales in early November to avoid a hit to sales in the first quarter, which ended Nov. 24, from the late Thanksgiving weekend, which lasted into December.
The company is offering products at deep discounts, including the LG UltraGear gaming monitor for $179, $70 less than the original price, and JBL headphones for $69.99, a 30% discount.
Archrival Walmart, which similarly offers higher discounts and promotions, raised its annual sales and profit forecasts for the third time this year in November, suggesting strong consumer spending.
Costco's first-quarter sales rose 7.5% to $62.15 billion, beating analysts' expectations of $62.08 billion, according to data compiled by LSEG.
with post wire
