Target and Best Buy have warned customers to brace for higher prices due to President Donald Trump’s escalating trade war. The newly imposed 25% tariffs on imports from Mexico and Canada took effect Tuesday, while tariffs on Chinese goods doubled to 20%.
Target CEO Brian Cornell cautioned that Mexican tariffs could quickly impact seasonal produce prices, leading to increased costs for items like strawberries, avocados, and bananas. In a CNBC interview following Target’s fourth-quarter earnings report, he noted that while the company will attempt to shield consumers, price hikes are expected in the coming days. Target relies on Mexican imports for fresh produce during the winter months.
Best Buy echoed similar concerns, highlighting that China and Mexico are key sources for its electronics and appliances. CEO Corie Barry stated during a fourth-quarter earnings call that about 60% of Best Buy’s products originate from China, with Mexico as its second-largest supplier. She warned that vendors would likely pass tariff costs onto retailers, making price increases for American consumers “highly likely.” Following her remarks, Best Buy’s stock dropped 13%.
For months, business lobbying groups have cautioned that tariffs could lead to widespread price hikes as companies adjust costs. Affected goods range from groceries, such as meat and grains, to consumer electronics, vehicles, and lumber. A recent Morgan Stanley survey of 2,000 U.S. consumers found that economic confidence declined in February, with only 38% expecting improvement in the next six months—down from 44% the previous month—while 48% foresee worsening conditions.
