Target and Best Buy have warned consumers to expect higher prices as a result of President Donald Trump’s escalating trade war.
Tariffs of 25% on imports from Mexico and Canada went into effect on Tuesday, while import levies on Chinese goods doubled to 20%.
Trump’s tariffs on Mexican goods could raise seasonal produce prices as early as this week, Target CEO Brian Cornell warned Tuesday. Customers will pay more for strawberries, avocados, and bananas, he said in a CNBC interview following Target’s fourth-quarter earnings.
Target imports fruit and vegetables from Mexico in the winter.
“Those are categories where we will try to protect pricing but the consumer will likely see price increases over the next couple of days,” according to Cornell.
Best Buy also warned customers that prices could rise. China and Mexico are the leading markets for the electronics and appliances it sells.
China accounts for approximately 60% of Best Buy’s total product cost. Mexico is the second-largest country.
“We have never seen this wide range of tariffs. “This, of course, has an impact on the entire industry,” Best Buy CEO Corie Barry said during a fourth-quarter earnings call with analysts Tuesday.
Barry stated that vendors would pass along tariff costs to retailers, “making price increases for American consumers highly likely.” Following the remarks, shares fell 13%.
For months, business lobbying groups have warned that consumers will face higher prices as companies pass on tariff costs.
The countries Trump has targeted provide a diverse range of goods. Customers in grocery stores may notice an increase in meat and grain prices. Prices of new cars and trucks, consumer electronics, and lumber may also rise.
According to a Morgan Stanley survey of 2,000 U.S. consumers, their economic outlook and household finances deteriorated in February. Only 38% of consumers expect the economy to improve over the next six months, down from 44% last month, while 48% expect it to worsen.