Target and Best Buy warned Tuesday that shoppers should expect to exceed the prices of certain items as Trump's tariffs on Mexico, Canada and China come into effect and those countries take retaliatory action.
At Target's annual investors meeting on Tuesday, CEO Brian Cornell told reporters that consumers will see prices rise for avocados and other agricultural products over the next few days. He said these price increases are likely to affect the industry as a whole.
Cornell said it is not ready to specify all target products that can see price increases.
“I think things are unfolding very quickly,” he said. “We look at this carefully, are these long-term tariffs? Is this a short-term action? How will this unfold over time? I think we're all guessing. I think we're going to listen, learn and confirm that we have control over what we have control. But we don't want to overreact to a day and one headline now.”
Target's Chief Commercial Officer Rick Gomez said over the phone that the company still can't provide details about price increases as it wants to pricing in real time and be strategic.
Target was used to source 60% of over-the-counter products from China in 2017, but according to company executives, it fell to 30%. They said they hope to cut it even further by the end of next year, but this will be four years before schedule. Target said it aims to source more in the US, Guatemala and Honduras.
“It's not as simple as throwing costs away,” Gomez said. “We need to think about this from a consumer perspective, make sure the pricing architecture makes sense and put us where there are affordable options.”
Best Buy provided a similar message on the revenue call on Tuesday, highlighting the importance of international trade for the electronics industry, highlighting that consumers are “very likely” to raise prices.
“Trade is extremely important to our business and industry. The consumer electronic supply chain is extremely global, technical and complex,” Best Buy CEO Corie Barry said in a revenue call Tuesday. CNBC reported.
“Vendors across our assortment expect to pass on some tariff costs to retailers, allowing prices to rise for American consumers,” Barry added.
Trump's 25% tariffs on Canada and Mexico came into effect Tuesday after the 30-day delay expired. Trump has also increased tariffs on Chinese goods from 10% to 20%.
Canadian Prime Minister Justin Trudeau said her country would impose a 25% tariff on US goods, but Mexican President Claudia Sinbaum said her country would announce retaliatory efforts on Sunday without making any progress towards the agreement.
Wall Street deepened its two-day sale amid the rising trade war, with both the Dow Jones industrial average and the S&P 500 down more than 1%.
“We've never seen this kind of tariff, and this of course affects the entire industry. So it's not just the best buying question, it's a question from a wide range of industry. According to CNBC, Barry said.
The Associated Press contributed.
