These retailers may raise prices if Trump's tariffs take effect
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A Walmart cart is seen on Nov. 18 in Miami, Florida. Photo: Joe Raedle/Getty Images
Walmart, the biggest retailer in the U.S., is the latest to indicate it may raise prices if President-elect Trump's planned tariffs take effect.
The big picture: Trump has vowed to impose sweeping tariffs in his next administration, sending companies scrambling to shift production out of China, stock up on inventory and weigh price increases.
State of play: As companies brace for an increase in the cost of importing products, shoppers can expect to see a reflection at their favorites stores.
- Consumers could lose $46 billion to $78 billion in spending power each year if the new tariffs are implemented, per a National Retail Federation study published this month.
- "If the tariffs go into effect at the levels that have been spoken about, retailers will have no choice but to put up prices," GlobalData managing director Neil Saunders said.
- "So one of the things they will have to do is pass some of those cost increases over to consumers in the form of higher prices," he said, adding it will be a "move of last resort for a lot of retailers."
- Karoline Leavitt, a spokesperson for Trump and the incoming White House press secretary, told Business Insider: "In his first term, President Trump instituted tariffs against China that created jobs, spurred investment, and resulted in no inflation," adding that Trump would "work quickly" to create jobs and lower taxes.
Zoom in:
Here's a look at retailers that have said they'd likely hike prices if such tariffs are instated:
- Walmart spokesperson Molly Blakeman told Axios Tuesday that the company is concerned about significantly increased tariffs "because they could lead to increased costs for customers."
- Walmart's CFO John David Rainey told CNBC Tuesday that while the company "never want to raise prices ... there probably will be cases where prices will go up for consumers."
- Lowe's CFO Brandon Sink said on an earnings call Tuesday that about 40% of the company's cost for sold goods is from outside of the U.S. He said tariffs "certainly would add product costs," but added "timing and details remain uncertain at this point," per CNBC.
- Autozone CEO Philip Daniele said on an earnings call, "If we get tariffs, we will pass those tariff costs back to the consumer," per Benzinga.
- Columbia Sportswear CEO Tim Boyle said the company may be forced to raise prices, too, in order to cover additional tariff charges, according to Benzinga.
- Stanley Black & Decker CEO Donald Allan said to analysts in an October earnings call that the manufacturing firm was looking at "a variety of different scenarios" to prepare for Trump's tariffs proposal and "coming out of the gate, there would be price increases associated with tariffs that we put into the market," per Business Insider.
Zoom out: Some companies are looking to change where they import goods from to circumvent potential tariff's under the next Trump administration.
- Steve Madden CEO Edward Rosenfeld said last week that the $3 billion shoe company has been "planning for a potential scenario in which we would have to move goods out of China more quickly."
- Since Trump's election win, they've put that plan into motion. "You should expect to see the percentage of goods that we sourced from China to begin to come down more rapidly going forward."
What we're watching: Target and TJX Companies will have earnings calls Wednesday, with several other retailers scheduled for later this week.
- Representatives from Target, Kroger, Costco and Sam's Club did not immediately respond to Axios' requests for comment on the proposed tariffs.
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