Shoppers may soon feel the effects of Trump’s latest trade war, as major retailers warn of price hikes on everything from fruits and vegetables to electronics.
Target CEO Brian Cornell revealed Tuesday that the company may raise prices on fresh produce in response to the new tariffs. Best Buy’s CEO echoed similar concerns, saying that price increases are “highly likely.” Even Walmart, known for its low prices, has admitted that it won’t be completely immune to rising costs caused by Trump’s tariffs on China, Canada, and Mexico.
The warnings come after the latest round of tariffs took effect, prompting retaliation from Canada and China, with Mexico expected to follow. As Wall Street, economic experts, and business leaders raise concerns about the impact on household budgets and consumer spending, retailers are preparing customers for potential sticker shock.
“Now that these tariffs are coming into play, the cost of many of these products are going to go up quite substantially,” said retail expert Neil Saunders, adding that retailers won’t be able to absorb all the added costs.
While some companies, like Chipotle, have vowed to eat the costs instead of passing them on to customers, other retailers may hesitate to raise prices out of fear of scaring off shoppers. However, Target and Best Buy are already preparing customers for the inevitable.
The timing couldn’t be worse for both companies, which have faced struggles even before Trump’s latest trade policies. Target has been trying to attract inflation-weary shoppers, while Best Buy has seen customers delay gadget upgrades due to economic uncertainty.
While perishable goods like groceries are expected to see price hikes right away, items like electronics, clothing, and home goods may take longer to be affected due to existing inventory. However, if the tariffs remain in place, retailers will eventually pass those costs on to consumers.
The stock market reacted negatively to the tariff news, with the S&P 500 dropping 1.1% and the Dow Jones losing nearly 600 points by midday Tuesday. Since Trump’s re-election win, markets have lost over $3 trillion in value, according to Bloomberg.
Retail analysts say this economic uncertainty could slow down consumer spending even further, especially for middle- and lower-income households already feeling the pinch of inflation.
With mortgage demand falling, home improvement retailers like Home Depot and Lowe’s are already seeing weaker sales, and recent data suggests consumers are saving more and spending less.
Although the economy remains strong overall, experts warn that sticky inflation, a cooling job market, and ongoing trade tensions could increase the odds of a recession.
For now, shoppers should brace for higher prices—and retailers are hoping customers don’t start cutting back even more.
