Tag: Canada

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

His push comes even after a slew of retailers have issued concerns about the tariffs pumping up the costs of their products or forcing them to cut back on inventory. Wall Street titan Goldman Sachs also raised concerns that hiking the levies on products will drive up costs for everyday Americans. 

TJ MAXX CEO SAYS COMPANY COULD BENEFIT FROM TRUMP’S PROPOSED TARIFFS

Trump argued last month that tariffs when used properly will “make our country rich.”

By contrast, the head of the National Retail Federation (NRF) – the nation’s largest trade group – previously warned that shoppers could face higher prices on an array of goods if Trump’s proposed tariffs on imports to the U.S. are implemented. The trade group estimated that families could lose between $46 billion and $78 billion in spending power annually.

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

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

He said the trade group is looking “forward to working with the president to see 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

U.S. COMPANIES WARNING ABOUT TARIFFS

Costco

During an earnings call in December, Costco CFO Gary Millerchip warned that Trump’s proposed tariffs would raise costs for consumers. 

In general, he told analysts that “tariffs raise costs so that’s not something that we see as a positive.”

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

He said the company is going to try and work with its vendors “to make sure we’re looking for ways where we can to mitigate the cost.”

Dollar Tree

Dollar Tree – which has high exposure to China – warned that if tariffs are implemented, then the company might 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 has a “wide range of potential actions” it can take to mitigate additional tariffs if they materialize, including changing product details or sizes and even getting rid of items altogether if they become 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 suppliers. 

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

Home Depot

Home Depot CEO Ted Decker told analysts during an earnings call in November that whatever happens with “tariffs will be an industrywide impact. It won’t discriminate against different retailers and distributors who are importing goods. The type of product as an industry is generally sourced from the same countries.” 

Lowe’s 

Lowe’s Chief Financial Officer Brandon Sink told analysts during an earnings call in November that 40% of its goods sold are sourced outside the U.S., “and that includes both direct imports and national brands through our vendor partners.” 

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

Walmart

Walmart Chief Financial Officer John David Rainey warned that Trump’s proposed tariffs could lead to higher prices for its shoppers. 

(ROBYN BECK/AFP via Getty Images/File)

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

While Rainey said two-thirds of the items the company sells are made, grown or assembled in the U.S., he said it is “in no way immune to this.” 

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A Walmart spokesperson said in a statement to FOX Business that the company remains “concerned that significantly increased tariffs could lead to increased costs for our customers at a time when they are still feeling the remnants of inflation.” 

The retail industry isn’t the only one that’s raised concerns. For instance, the head of finance for Stellantis hinted that it could shift production to the U.S. in the event that tariffs are enacted.