Retailers warn Americans to pay more after Trump launches trade war: Report

Hours after President Donald Trump’s long-threatened tariffs against Canada and Mexico and his hike in levies on China came into effect on Tuesday, CEOs of two large retailers in the US said shoppers are likely to see prices rise as a result of the tariffs.

According to The Guardian, citing a CNBC report, warnings from the CEOs of Best Buy and Target contradict Trump’s claim that the costs of his trade war will not fall on US consumers, who rebelled against his predecessor Joe Biden after the US economy was hit by its worst bout of inflation in decades.

“Those are categories where we’ll try to protect pricing, but the consumer will likely see price increases over the next couple of days,” Target CEO Brian Cornell told CNBC in an interview.

“If there’s a 25% tariff, those prices will go up,” he added.

On an earnings call, Best Buy CEO Corie Barry said China and Mexico were his firm’s two biggest suppliers, and price hikes were inevitable.

Starting just after midnight, imports from Canada and Mexico are now subject to a 25% tariff, with Canadian energy products facing a 10% duty.

The 10% tariff on Chinese imports, imposed by Trump in February, has been raised to 20%, prompting Beijing to retaliate with tariffs up to 15% on various US farm exports and expand export controls on US companies.

Canadian Prime Minister Justin Trudeau announced tariffs on over $100 billion worth of American goods within 21 days.

Mexico also announced retaliatory tariffs, with President Claudia Sheinbaum saying that she would introduce the US products Mexico will target with tariffs on Sunday in a public event in Mexico City’s central plaza.

Unlike China and Canada, Mexico decided to wait until Sunday, though the country has said since January that it had a plan ready for precisely this scenario.

These actions have sparked fears of rising inflation and a potential trade war, even as Trump claims that import taxes are a straightforward path to national prosperity. He has dismissed warnings from economists, asserting that tariffs can remedy the nation’s economic issues.

“It’s a very powerful weapon that politicians haven’t used because they were either dishonest, stupid or paid off in some other form,” Trump said Monday at the White House.

“And now we’re using them,” he added.

The tariffs were originally scheduled to begin in February but were postponed for negotiations. While the stated goal is to combat drug trafficking and illegal immigration, both Canada and Mexico report progress on these fronts.

Trump has indicated that tariffs will only be lifted if the US trade imbalance improves, a resolution unlikely to align with political timelines.

With inputs from agencies