Trumps Tariffs on Mexico, Canada: What is means for shoppers

President Donald Trump renewed his commitment to imposing tariffs on imports on his first day in office, saying a 25% levy would be imposed on all goods from Canada and Mexico by February. He reiterated some of those remarks Tuesday.

Its decision comes even after a large number of retailers have expressed concerns that tariffs are inflating the costs of their products or forcing them to reduce their inventories. Wall Street titan Goldman Sachs also raised concerns that increasing taxes on products would lead to higher costs for ordinary Americans.

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Trump claimed last month that tariffs, when used correctly, will “make our country rich.”

In contrast, the head of the National Retail Federation (NRF) – the nation’s largest trade group – previously warned that shoppers could face higher prices on a range of products if Trump decides to do so. proposed tariffs on imports to the United States are implemented. The trade group estimates that families could lose between $46 billion and $78 billion in annual purchasing power.

On Monday, NRF Executive Vice President of Government Relations David French said the United States “needs to first review our trade relationships to ensure those relationships are structured to achieve just outcomes, balanced and effective for American workers and businesses.”

“Tariffs are taxes paid by Americans, and any further tariff increases should be deployed methodically and effectively only on the most strategic goods,” French said. “Undertaking a strategic assessment of business priorities is an important first step.”

He said the trade group looked forward to “working with the President to ensure that the resulting policy changes are carefully targeted and create an environment that attracts investment and protects critical industries.”

Trump’s tariffs would drive up consumer prices: National Retail Federation

WARNING FROM US BUSINESSES ABOUT PRICES

Costco

During an earnings conference call in December, Costco Chief Financial Officer Gary Millerchip warned that Trump’s proposed tariffs would increase costs for consumers.

Generally speaking, he told analysts that “tariffs increase costs, so it’s not something we view as a positive.”

“When it rains, it rains on everyone,” he added.

(Angus Mordant/Bloomberg via Getty Images/File)

He said the company would try to work with its suppliers “to make sure we’re looking at ways to reduce costs.”

Dollar tree

Dollar tree – which has heavy exposure to China – warned that if tariffs were implemented, the company might then have to change product details or sizes and even get rid of items altogether if they become too expensive .

(Angus Mordant/Bloomberg via Getty Images/File)

In December, the discount retailer told analysts it had a “wide range of potential actions” to mitigate additional tariffs if they materialize, including changing product details or sizes and even getting rid of items altogether if they became too expensive.

Dollar Tree said the last time the retailer faced this issue, in 2018 and 2019, it adjusted its products and negotiated lower costs with its suppliers.

“Those options are still available to us,” interim CEO Michael Creedon told analysts during a Dec. 4 earnings conference call. “On top of this, we now have detailed plans in place to shift sources of supply for most of our products to other countries, and multi-pricing gives us additional flexibility on our product assortment.”

Home deposit

Home Depot CEO Ted Decker told analysts during a November earnings conference call that whatever happens with the “tariffs, they’re going to have an impact on the entire industry.” They will not discriminate against different retailers and distributors who import goods. from the same countries. »

Lowes

Lowe’s Chief Financial Officer Brandon Sink told analysts during a November earnings conference call that 40% of its products sold came from outside the United States, “and that includes both imports direct and national brands via our partner suppliers.”

“And as we look at the potential impact, [it] this would certainly increase product costs, but the timing and details remain uncertain at this point,” Sink said.

Walmart

CFO of Walmart John David Rainey warned that Trump’s proposed tariffs could lead to higher prices for his buyers.

(ROBYN BECK/AFP via Getty Images/File)

“The tariffs are going to be inflationary. There’s no doubt about that,” Rainey said during an interview with Liz Claman on “The Claman Countdown.”

Even though Rainey said two-thirds of the items the company sells are made, grown or assembled in the United States, he said it is “by no means immune to that.”

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A Walmart spokesperson said in a statement to FOX Business that the company remains “concerned that a significant rate increase could result in increased costs for our customers at a time when they are still feeling the remnants of the ‘inflation “.

The retail sector is not alone in expressing concerns. For example, Stellantis’ finance chief hinted that it might shift production to the United States if tariffs were passed.