Trumps tariffs in Mexico, Canada: What it means for buyers

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

Its push also comes after a host of retailers have voiced concerns about the tariffs pumping up the costs of their products or forcing them to reduce inventory. Wall Street titan Goldman Sachs has also raised concerns that the hike in levies on products will increase costs for everyday Americans.

TJ MAXX CEO Says Company Could Benefit From Trump’s Proposed Tariffs.

Trump argued last month that the tariffs, when used properly, “will save our country.”

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 a variety of goods if Trump’s. proposed tariffs on imports to the United States are implemented. The trade group estimated that households could lose between $46 billion and $78 billion in annual spending power.

On Monday, NRF Executive Vice President of Government Relations, David French, said that the United States first “needs a review of our trade relations to make sure that those relations are structured to achieve fair, balanced and effective results for workers Americans and companies”.

“Tariffs are taxes paid by Americans, and any new tariff tax increase should be implemented methodically and effectively only toward the most strategic goods,” French said. “Undertaking a strategic assessment of business 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 WILL RAISE CONSUMER PRICES: NATIONAL RETAIL FEDERATION

US COMPANIES WARN OF FEES

Costco

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

Overall, he told analysts that “tariffs increase costs so it’s not something we see as positive.”

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

(Angus Mordant/Bloomberg via Getty Images/File)

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

Dollar Tree

Dollar Tree – which has a high exposure to China – warned that if the tariffs are implemented, then the company may have to change product details or dimensions 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 fees if they materialize, including changing product details or sizes and even getting rid of items at all if they become too expensive.

Dollar Tree said that the last time the retailer faced this problem, in 2018 and 2019, it adjusted its products and negotiated lower costs with suppliers.

“These options are still at our disposal,” interim CEO Michael Creedon told analysts on a Dec. 4 earnings call. “In addition to those, we now have detailed plans in place to shift the supply sources for most of our products to alternative countries, and multi-pricing 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 have an impact on the industry. They don’t discriminate against different retailers and distributors that import goods. The type of product as an industry is generally 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 purchased outside the United States, “and that includes both direct imports and national brands through the our vendor partners”.

“And as we look at the potential impact, (it) will certainly add to product costs, but the 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 his buyers.

(ROBYN BECK/AFP via Getty Images/File)

“The rates will be inflation. There is no dispute that,” Rainey said during an interview with Liz Claman in “The Claman Countdown.”

While Rainey said two-thirds of the items the company sells are made, grown or assembled in the United States, he said he’s “not immune to that.”

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

The retail industry is not the only one that has raised concerns. For example, the head of finance for Stellantis hinted that he could move production to the United States if the tariffs are enacted.