The tariffs imposed by U.S. President Donald Trump appear to have a faster impact than anticipated, as companies like Target and Best Buy have begun warning their customers about price increases.
On Tuesday, March 4, tariffs on imports from Mexico, Canada, and China went into effect. According to Brian Cornell, CEO of Target, this could result in price increases on seasonal products, starting as early as this week.
Which Target products will see a price increase due to the tariffs?
According to Cornell, customers will have to pay more for various products, especially fruits and vegetables imported from Mexico during the winter season, such as:
- Avocados
- Strawberries
- Bananas
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Which Best Buy products will see a price increase due to the tariffs?
Best Buy is another company that has warned its customers about price hikes. CEO Corie Barry stated that sellers would pass on the costs of the tariffs to retailers, leading to higher prices for American consumers. This is because about 60% of Best Buy’s products come from China, and 20% from Mexico.
Unlike Target, Best Buy does not expect its prices to rise immediately but rather between the second and fourth quarters of the year, particularly in the appliance sector, due to having about six weeks’ worth of inventory.
Target’s sales and stock fall
Target’s stock dropped by 4.8% shortly after the market opened on Wall Street. Over the past year, it has accumulated a 20% decrease, while the S&P 500 index has risen by 14%. In addition to this financial impact, the company also reported a decline in sales during February and forecasts only 1% annual growth.
This situation is compounded by controversy over the recent cancellation of its diversity, equity, and inclusion (DEI) programs, which has led to protests and calls for boycotts from progressive consumers. Community leaders have urged a 40-day boycott of the chain, encouraging shoppers to choose businesses run by Black individuals.
What tariffs did Trump impose on Mexico, Canada, and China?
According to the executive order previously signed by the Republican president, a 25% tariff will be applied to imports from Canada, along with a 10% tariff on oil, natural gas, electricity, and other energy products.
Mexican imports will face a 25% tariff, while China will be affected by a tariff increase from 10% to 20%.
Why did Donald Trump impose tariffs on Mexico, China, and Canada?
President Donald Trump has stated that the tariffs are a result of illegal immigration and drug trafficking, especially fentanyl, which he blames on Mexico, Canada, and China.
In the executive order he signed on his first day in office, Trump also accused the Mexican government of having an alliance with drug cartels, which he claims represents a national security threat to the U.S. He also warned that Mexican cartels operate from Canada.
Donald Trump announces tariffs on agricultural products
The tariffs that went into effect early Tuesday morning will not be the only ones, as President Donald Trump announced that tariffs will be applied to agricultural products starting on April 2 of this year.
“To the great farmers of the United States: Get ready to start producing a lot of agricultural products to be sold INSIDE the United States. Tariffs will be applied to foreign products on April 2. Have fun!” the president posted on his official Truth Social account.
