TARGET bosses have revealed how the chain is trying to shield its customers from potential price hikes that are expected as a result of Donald Trump’s tariff agenda.
Bosses turned to different levers to try and prevent hikes – despite admitting that price increases for certain areas seem likely.
Trump has declared April 2 “Liberation Day” as he prepares to hit countries around the world with tariffs.
The sweeping round of levies is on top of 20% tariffs slapped on Chinese imports, and 25% tariffs reserved for Mexican goods.
As shoppers brace for the potential impacts, Target chiefs have tried to be less reliant on Chinese imports, per Quartz.
Bosses have cut dependence on Chinese goods from 60% to 30%.
Target execs reportedly told a Chinese supplier of hairpins to pick up half of the costs of the tariffs, according to the outlet.
The supplier ended up losing the contract after negotiations stalled.
The company has also reduced clothes production in China.
Rick Gomez, Target’s chief commercial officer, revealed that some clothing items are produced in Guatemala and Honduras, as reported by CNBC.
Last month, Target CEO Brian Cornell was frank with shoppers as he explained what could arise as a consequence of the tariffs.
He noted how the company relies on Mexican produce during the winter season.
And, Cornell explained that levies on Mexican imports could see prices rise.
The prices of strawberries, avocados and bananas could rise.
“If there’s a 25% tariff, those prices will go up,” Cornell told CNBC.
Former Target CEO, Gerald Stoch, appeared to downplay the impact of tariffs on shoppers.
“I think this whole thing with the tariffs is grossly exaggerated by a factor of at least two,” he told the Fox Business show Varney & Co.
It’s not just Target’s CEO that has warned about potential price rises.
In an earnings call, Best Buy CEO Corie Barry warned: “China and Mexico remain the No.1 and No. 2 sources for products we sell, respectively.
“The consumer electronics supply chain is highly global, technical and complex.”
Barry admitted that price rises for shoppers are likely.
WALMART PRICING STRATEGY
Walmart chiefs have also worked to try and shield customers from the impact of tariffs by negotiating with suppliers.
Bloomberg reported that retail bosses have asked suppliers for a 10% price cut per each round of tariffs.
Walmart bosses identified items like kitchenware and clothes when trying to negotiate according to reports.
Trump’s tariffs on Mexico and Canada are to come into force – a month after a temporary pause was agreed.
Goods covered under the United States-Mexico-Canada Agreement were spared.
But, the US and China have been embroiled in a tit-for-tat trade war.
In February, Trump proposed a 10% tariff on China before it doubled to 20%.
Beijing then retaliated with a tariff of up to 15% on US agricultural products.
Chinese state media have already warned Beijing will retaliate to Trump’s April 2 levies.
Beijing has warned that it’s ready for any type of conflict with the US.
Shoppers have been warned of potential price hikesGetty ReutersWalmart is reportedly negotiating deals with Chinese suppliers in a bid to lower costs[/caption] APTrump, seen in the Oval Office on March 31, has declared April 2 Liberation Day[/caption] Read More Details
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