Former Reagan economist Art Laffer examines Trump's controversial economic plan to impose 25 percent tariffs on Mexico and Canada starting February 1.
President Donald Trump He renewed his pledge to impose tariffs on imports on his first day in office, saying a 25 percent tax would be imposed on all goods from Canada and Mexico by February. He repeated some of those comments on Tuesday.
His push comes even as a number of retailers have raised concerns the tariffs will increase the cost of their products or force them to reduce inventory. Wall Street trader Goldman Sachs also raised concerns that tax increases on products would increase costs for everyday Americans.
CEO of TJ MAXX says the company could benefit from Trump's proposed tariffs
Trump argued last month that tariffs, when used properly, “make our country rich.”
In contrast, the head of the National Retail Federation (NRF) – the nation's largest trade group – has previously warned that shoppers could face higher prices on a range of goods if Trump decides. Proposed tariffs for imports are implemented in the United States. The trade group estimated that households could lose between $46 billion and $78 billion Annual consumption power.
David French, NRF's executive vice president for government relations, said Monday that the U.S. first “needs to reexamine our trade relationships to ensure they are built to achieve fair, balanced and effective outcomes for American workers and businesses.”
“Tariffs are taxes that Americans pay, and any new tariff increases should be methodically and effectively applied to only the most strategic goods,” French said. Conducting a strategic assessment of business priorities is an important first step.
He said the trade group looks 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 important industries.
National Retail Federation: Trump Tariffs Will Raise Consumer Prices
American companies warning about tariffs
Costco
Costco CFO Gary Millerchip warned during an earnings call in December that Trump's proposed tariffs would increase costs for consumers.
Overall, he told analysts that “tariffs increase costs in a way that we don't see as positive.”
“When it rains, it rains on everyone,” he added.
| ticker | security | the last | change | change % |
|---|---|---|---|---|
| cost | COSTCO WHOLESALE CORP. | 944.70 | -3.03 |
-0.32% |
(Angus Mordant/Bloomberg via Getty Images/File)
He said the company will try to work with its vendors to make sure we look for ways to reduce costs.
dollar tree
dollar tree — which is highly exposed to China — warned that if tariffs are imposed, the company may be forced to change product details or sizes, or even get rid of items altogether if they become too expensive. to be
| ticker | security | the last | change | change % |
|---|---|---|---|---|
| DLTR | DOLLAR TREE Inc. | 71.97 | -1.79 |
-2.43% |
(Angus Mordant/Bloomberg via Getty Images/File)
In December, the discount retailer told analysts it had a “wide range of potential actions” it could take to mitigate additional tariffs if they materialize, including changing product details or sizes and even getting rid of items if they become more expensive. to do
Dollar Tree said 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 available to us,” Interim CEO Michael Creedon told analysts on a Dec. 4 earnings call. In addition to these, we now have detailed plans to shift the sourcing of most of our products to other countries, and several prices will give us more flexibility in our product portfolio.
warehouse
Home Depot CEO Ted Decker told analysts during an earnings call in November that whatever happens with the tariffs will have an impact on the industry. This will not discriminate against different retailers and distributors who import goods. Product type as an industry in general is its source. from these countries.”
| ticker | security | the last | change | change % |
|---|---|---|---|---|
| HD | THE HOME DEPOT Inc. | 410.08 | -8.36 |
-2.00% |
Law
Lowe's CFO Brandon Sink told analysts during an earnings call in November that 40 percent of its merchandise sold comes from outside the United States, “and that includes direct imports and national brands through our dealer partners.” ”
“And as we look at the potential impact, it will certainly increase product costs, but the timing and details are unclear at this point,” Sink said.
| ticker | security | the last | change | change % |
|---|---|---|---|---|
| LOW | LOWE'S COMPANIES INC. | 258.05 | -5.15 |
-1.96% |
Walmart
CFO of Walmart John David Rainey warned that Trump's proposed tariffs could lead to higher prices for shoppers.
| ticker | security | the last | change | change % |
|---|---|---|---|---|
| WMT | WALMART Inc. | 93.23 | +0.15 |
+0.16% |
(ROBYN BECK/AFP via Getty Images/File)
“Tariffs will be inflationary,” Rainey said in an interview with Liz Claman on Claman's Countdown. There is no debate about this.
While Rainey said two-thirds of the items the company sells are made, grown or assembled in the United States, he said it is “by no means immune to that.”
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A Walmart spokesperson told FOX Business in a statement that the company remains “concerned that significant tariff increases could result in higher costs for our customers at a time when they are still feeling the effects of inflation.”
The retail industry is not the only one that has raised concerns. For example, Stellantis' chief financial officer indicated that he could move production to the United States if tariffs were imposed.