Consumers in the United States may soon face higher prices on essential goods and electronics due to the latest round of tariffs imposed by President Donald Trump on China, Canada, and Mexico.
Executives from Target and Best Buy warned that these tariffs will directly impact consumer costs, while Walmart acknowledged that it won’t be “completely immune” to the effects of the trade war.
Target’s CEO stated that the company may raise prices on fruits and vegetables in response to the tariffs, while Best Buy’s top executive called the price increases “highly likely.”
The tariffs took effect on Tuesday, March 4, triggering immediate retaliatory measures from China and Canada. Mexico has also announced a response set for Sunday, March 9.
These warnings pose a challenge for Trump, who took office on January 20, promising to lower consumer costs “from day one.” However, his administration has struggled with persistent inflation and shortages of basic goods such as eggs, coffee, and chocolate.
The tariff policy has sparked concern among investors, retail industry leaders, and economists, who fear that rising costs could slow household spending—a crucial factor, as consumer spending accounts for two-thirds of the U.S. economy.
“With these tariffs now in effect, the cost of many products will increase significantly,” explained Neil Saunders, managing director at consulting firm GlobalData, in an interview with NBC News. “Retailers cannot fully absorb this increase without passing it on to customers.”
Some companies have pledged to cover part of the costs. Chipotle’s CEO, for example, stated that his company will try to absorb the tariff-related expenses. However, analysts predict that many other businesses will have no choice but to raise prices, albeit cautiously, to avoid consumer backlash.
“Retailers and manufacturers will have to take some of the hit,” JPMorgan analyst Chris Horvers told CNBC. However, he believes that non-essential products may withstand price hikes better than basic necessities.
Despite efforts to shield consumers from the impact, Target and Best Buy have started preparing customers for potential price increases. Both retailers were already facing challenges before Trump’s re-election: Target has struggled to attract inflation-weary shoppers, while Best Buy has seen declining demand for electronics as consumers delay upgrading their devices.
On Tuesday, Target reported that “consumer uncertainty” and weak sales last month could impact the company’s performance in the coming months. Meanwhile, Best Buy’s stock fell 14% despite reporting a slight increase in sales and better-than-expected financial results.
Experts predict that perishable goods, such as fruits and vegetables, will be the first to see price increases, aligning with Target’s warning. In contrast, the impact on technology and appliances may take longer to materialize, as many retailers still have inventory that arrived before the tariffs were imposed.
However, if tariffs remain in place long-term, higher costs will eventually extend to other sectors, including furniture, clothing, and manufactured goods from affected countries.
“No retailer is saying that 2025 will be a fantastic year for them,” Saunders concluded. “There is significant uncertainty in the industry, and all signs point to this year being mediocre in terms of growth and negative in terms of profits.”
