U.S. President Donald Trump has taken a tough stance, stating that he would impose additional tariffs of 25% on Canada and Mexico and 10% on China, while also imposing retaliatory tariffs in response to the tariffs from the three countries. As a result, corporate executives are stepping up to voice their concerns. Retail and distribution corporations, in particular, sensitive to consumer prices, expressed worries, stating that price increases are inevitable.
According to Business Insider on the 5th (local time), Corie Barry, CEO of the U.S. electronics retailer Best Buy, noted during the earnings conference call on the 4th, "We have never seen such extensive tariffs. Of course, this affects the entire industry, so it's not just our problem; however, tariffs at this level will lead to price increases," adding that "the possibility of increasing prices on imported products is very high."
According to CEO Barry, while the proportion of products directly imported by Best Buy from China and Mexico is only 2-3%, if barriers to exports from China, often dubbed 'the world's factory,' and neighboring Canada increase, raw material and component prices across the supply chain could rise, meaning that end consumer prices are also expected to increase.
Jamel Jackson, Chief Financial Officer of AutoZone, the largest automotive aftermarket company in the U.S., also announced during the same conference call that they plan to raise prices to offset the impact of tariffs. He stated, "We plan to maintain profitability even after the imposition of tariffs," adding that "as historical experience shows, the entire industry will act in a rational manner."
Brian Cornell, CEO of Target, the eighth largest retailer in the U.S., mentioned in an interview with CNBC that prices of certain groceries, particularly fresh produce imported from Mexico and Canada, such as avocados, strawberries, and bananas, may soon rise. He stated, "We will strive to protect prices, but if a 25% tariff is implemented, prices will increase."
Regarding price increases, Rick Gomez, Chief Commercial Officer, explained, "For example, we might be able to keep the price of our '5-dollar T-shirt' the same, but we may need to raise prices on other products like dresses to maintain profitability."
On the other hand, there are corporations that have stated they will not raise prices. Scott Boatright, CEO of the well-known Mexican fast-food chain Chipotle, revealed in an NBC Sunday interview that they will not pass on the rising costs due to tariffs to consumers.
CEO Boatright stated, "We believe it is unfair to pass on those costs to consumers, as prices tend to be permanent," adding, "We will provide special value to our consumers. We will stick to this direction." He had previously mentioned that to minimize the impact of tariffs, they reduced the supply of Mexican avocados by 50% while increasing supplies from Colombia, Peru, and the Dominican Republic.