President-elect Donald Trump has big plans for his presidency. During campaign speeches throughout 2024, Trump vowed to impose tariffs on imported goods as soon as he takes office next year.
Tariffs are taxes companies pay to import goods from overseas, and often, the extra costs are passed down to consumers, resulting in higher prices for goods and services.
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Trump proposed to impose tariffs of 60% to 100% on all goods coming from China, 25% on all goods from Mexico and Canada, and 10% to 20% on goods imported from all other countries.
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The president-elect envisions these tariffs will encourage more companies to make their products in the U.S.
“The higher the tariff, the more likely it is that the company will come into the United States and build a factory,” said Trump in an interview with Bloomberg News in October.
While this proposal aims to boost business across the nation, many retailers have been warning that they may have to increase their prices as a result of Trump’s tariff proposal.
Here are five popular retailers who recently issued this stern warning.
1.) Walmart
In an interview with CNBC in November, Walmart Chief Financial Officer John David Rainey said tariffs are “inflationary for customers.”
“We never want to raise prices,” he said in the interview. “Our model is everyday low prices. But there probably will be cases where prices will go up for consumers.”
Kennesaw, GA / USA – Walmart line outside the store
JD and Kyle Shoot Stock/Getty Images
He also claimed that the company will be working with suppliers and its own private brand assortment in order to keep prices low.
Walmart (WMT) products are sourced in America, and also in countries such as China, India, Cambodia, Vietnam and the Dominican Republic, so it is no surprise that prices may increase as a result of Trump’s tariffs.
2.) AutoZoneÂ
During an earnings call in September, AutoZone CEO Philip Daniele said that if Trump does indeed impose these tariffs when he gets into office next year, AutoZone (AZO) will have to quickly adjust its pricing.
“If we get tariffs, we will pass those tariff costs back to the consumer, and we’ll pass them through,” said Daniele. “As they turn through, we know what the tariffs will be, we generally raise prices ahead of that.”
An exterior view of an AutoZone auto parts store in Bloomsburg.
He also acknowledged that the economy has been putting pressure on consumers’ wallets “for the last 20 months,” but the company is betting on repairs to help keep its business afloat.
“Have we seen the type of inflation that we saw over the last three years? No. Not certainly, not in my lifetime,” said Daniele. “But generally speaking, in tougher economic times, people will generally defer maintenance and discretionary items early in the cycle. And then, as we get further through the cycle, they start to repair their cars because they realize a little investment today.”
3.) Best BuyÂ
Best Buy CEO Corie Barry warned during an earnings call last month that Trump’s tariffs could have a major domino effect on Best Buy’s (BBY) business since 60% of its goods come from China, and its second-largest country of import is Mexico.
An employee brings a television to a customer’s car at a Best Buy store on Black Friday, traditionally one of the busiest shopping days of the year.Â
“I think it’s going to be a very fluid situation as we continue to work through it,” said Barry during the call. “Typically, in history, this ends up being some kind of costs that are shared. To some extent, the vendors have some. To some extent, Best Buy. But, of course, we see that the customer ends up bearing some of the cost of tariffs, and we’ve seen this before. And for us, that’s the hardest part. These are goods that people need, and higher prices are not helpful.”
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4.) Dollar TreeÂ
During an earnings call on Dec. 4, Dollar Tree Interim CEO Mike Creedon stated that if Trump’s tariffs are imposed, Dollar Tree (DLTR) is “prepared to act on multiple fronts.”
He said the company faced a similar challenge in 2018 and 2019, and its team was able to pull three levers when the price of importing a product became too expensive.
Dollar Tree storefront
Trong Nguyen / Shutterstock
“Back then, the choices were they could change some of the specs on the product, they could negotiate furiously with our suppliers, or they can eliminate the product altogether,” said Creedon. “They still have all three of those levers to pull.”
He also said that Dollar Tree may raise prices through its “multi-price” strategy.
“Multi-price gives us the ability to flex where we need to if a certain product becomes something that we’ve got to move in the market to be competitive,” said Creedon.
Related: Macy’s gives grim update about its future
5.) CostcoÂ
While speaking to investors on Dec. 12, Costco Chief Financial Officer Gary Millerchip acknowledged that tariffs, in general, may result in higher prices for consumers.
“When it rains, it rains on everybody,” said Millerchip during the call.
However, he stated that Costco (COST) has a plan in order to prevent skyrocketing prices in stores.
Shoppers outside a Costco store in Bayonne, N.J. on Dec. 9, 2023.
He said Costco will continue to ramp up inventory buying before the change takes effect, and it will try to work with its vendors in order to mitigate costs. He also said that the company will also “consider alternative sourcing locations” and may even pull back on stocking up on low-performing products in stores.
“I guess in context for us, the sort of the amount of business that’s affected, about a quarter of our business is nonfoods, and then a subset of that is imported,” said Millerchip.
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