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NEW YORK –Target CEO Brian Cornell warned Tuesday that shoppers can expect to see rising produce prices in the coming days due to President Donald Trump’s newly implemented tariffs on Mexican imports.
This week, 25% tariffs on goods from Mexico and Canada and a 10% duty on Chinese imports took effect, impacting a wide range of consumer products, including fresh fruits and vegetables. Target, which relies heavily on Mexican produce during winter, could be forced to pass higher costs onto customers as soon as this week.
“Those are categories where we’ll try to protect pricing, but the consumer will likely see price increases over the next couple of days,” Cornell told CNBC following the release of Target’s fiscal fourth-quarter earnings. He specifically pointed to potential price hikes for strawberries, avocados, and bananas.
Thorvardur de Shong
While inflation has eased recently, food and housing costs remain high, stretching household budgets. The latest round of tariffs has sparked concerns that prices could rise further. The Trump administration has argued that the tariffs will not significantly impact consumer costs, but retail executives remain wary.
Cornell downplayed the effect of Chinese tariffs on Target’s overall business, noting that the company has diversified its supply chain. Target now sources only 30% of its imports from China, compared to more than 60% previously. Additionally, just 17% of Target’s apparel is manufactured in China, with the company shifting production to nations like Guatemala and Honduras.
Despite posting fiscal fourth-quarter earnings and revenue that surpassed Wall Street expectations, Target issued a cautious outlook, warning of a “meaningful” drop in first-quarter profits due to ongoing economic uncertainty, weak February sales, and tariff-related concerns. The company joins other major retailers, including Walmart and Home Depot, in signaling potential challenges ahead for the retail sector.
