Earlier this month, the Trump administration hiked tariffs to 25% on $200 billion worth of Chinese goods. The tariffs applied to consumer products such as luggage, mattresses, handbags, bicycles, vacuum cleaners and air conditioners. Additionally, the Trump administration has threatened to expand tariffs on Chinese imports to an additional $325 billion in goods — including toys, clothes, shoes and consumer electronics.
Although major retailers have developed strategies to blunt the impact of tariffs so far, they warned that the trade war is impacting business. Shoppers will bear many of those costs.
Walmart, Target, Home Depot, Kohl's, Macy's (M) and others said over the past week that the tariffs have forced them to either alter their financial outlooks, remodel carefully-crafted supply chains or consider raising price tags for customers.
"We're concerned about tariffs because they lead to higher prices on everyday products for American families," Target chief executive Brian Cornell told analysts on Wednesday.
Home Depot (HD)said new 25% tariffs will add $1 billion to its costs. Kohl's (KSS), which imports about 20% of its merchandise from China, lowered its guidance for this year in part due to higher costs from tariffs.
AutoZone (AZO) CEO William Rhodes said his company would raise prices for consumers if tariffs increased the costs of buying auto parts.
"If we do, in fact, experience higher costs, it will be our intention to pass those higher costs on to our customers," Rhodes told analysts Tuesday.
Walmart (WMT) also said it will raise prices on some products as a result of the Trump administration's tariffs on Chinese goods.
"We're going to continue to do everything we can to keep prices low. That's who we are. However, increased tariffs will lead to increased prices, we believe, for our customers," Walmart financial chief Brett Biggs told reporters on a call after the company's earnings last week.