Target and Best Buy have warned customers to prepare for rising prices due to President Donald Trump's latest tariffs on imports from Mexico, Canada, and China.
The new tariffs, which took effect on Tuesday, include a 25% levy on products from Mexico and Canada, while duties on Chinese imports have doubled to 20%.
Target CEO Brian Cornell cautioned that seasonal produce prices could increase within days. "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 in a CNBC interview following Target's fourth-quarter earnings release.
According to The Verge, the retailer relies on Mexican imports for many fruits and vegetables during the winter, meaning shoppers could soon pay more for strawberries, bananas, and avocados.
Best Buy also signaled similar concerns. CEO Corie Barry stated during a fourth-quarter earnings call that higher costs from China and Mexico, the company's two primary suppliers, would likely be passed on to consumers.
"We expect our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers highly likely," Barry said. Following these remarks, Best Buy's stock dropped by 13%.
Target CEO announces that Americans will see higher prices "over the next couple of days" due to Trump’s tariff tax hike pic.twitter.com/yB6vjucdNy
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Tariffs Drive Up Consumer Prices as Industry Analysts Warn of Widespread Impact
Industry analysts and business lobbying groups have repeatedly warned that tariffs could result in higher prices across various consumer categories.
Grocery stores may see price hikes for meat and grains, while costs for new cars, trucks, electronics, and lumber are also expected to rise as companies absorb the added expenses.
A recent Morgan Stanley survey of 2,000 US consumers showed growing concerns about the economy, USA Today said.
The survey found that only 38% of respondents expect economic conditions to improve over the next six months, a decline from 44% the previous month. Meanwhile, 48% believe the economy will worsen, reflecting increasing uncertainty among shoppers.
Despite the tariff surge, there is a possibility of negotiation. Commerce Secretary Howard Lutnick suggested in a previous report from Bloomberg that Trump might "work something out" with Canada and Mexico.
He hinted at a potential compromise, stating that an announcement could come as soon as Wednesday.
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