New York — American consumers should brace for imminent price increases as two of the country’s largest retailers, Target and Best Buy, have signaled that newly imposed tariffs on imported goods from Mexico, Canada, and China will soon have tangible effects. Target’s CEO, Brian Cornell, has warned that these price hikes could take effect much sooner than anticipated, potentially within days.
The latest round of tariffs, implemented by President Donald Trump’s administration, includes a sweeping 25% levy on imports from Mexico and Canada, which officially went into effect on Tuesday. Additionally, tariffs on Chinese goods have been doubled from 10% to 20%, adding further strain to an already complex trade situation. These import duties come on top of existing tariffs affecting hundreds of billions of dollars in goods from China, exacerbating tensions between the United States and its key trading partners. In swift response, both China and Canada announced retaliatory tariffs on American exports, while Mexico is expected to follow suit with its own countermeasures.
According to the Trump administration, the primary justification for these tariffs is to curb the influx of fentanyl into the U.S. However, economic analysts and major retailers have raised concerns that these measures will have far-reaching consequences for American consumers, as the additional costs incurred by importers are likely to be passed down the supply chain, ultimately raising prices on a wide range of everyday products.
In an interview with CNBC on Tuesday, Cornell underscored the immediate impact on essential goods, particularly fresh produce. He noted that Target relies heavily on agricultural imports from Mexico, especially during the winter months, when domestic supply is limited. As a result, the company may have no choice but to adjust pricing on fruits and vegetables within the coming days. “These are categories where we strive to maintain affordable pricing, but given the circumstances, consumers should expect to see noticeable increases very soon,” Cornell stated.
Beyond grocery items, the broader implications of tariff uncertainty are expected to weigh on Target’s overall profitability this quarter. The company has acknowledged that the fluctuating trade policies have created an unpredictable business environment, making it difficult to maintain stable pricing structures.
Best Buy, another major retailer deeply affected by the tariffs, has also signaled forthcoming price increases, particularly in the electronics sector. The company’s supply chain is heavily dependent on imports from China and Mexico, two of the leading sources for consumer electronics sold in the United States.
Best Buy CEO Corie Barry addressed analysts in a call on Tuesday, emphasizing the unprecedented scope of the current tariff regime. “We’ve never encountered such a widespread application of tariffs, and this affects the entire industry. Our suppliers are already factoring in these additional costs, and we fully anticipate that a portion of those expenses will be transferred to retailers, making price hikes for American consumers almost inevitable,” Barry explained.
Backlash Over Target’s DEI Policy Shift
Meanwhile, Target is also facing significant challenges on another front—consumer backlash over its recent retreat from diversity, equity, and inclusion (DEI) initiatives. The company reported a decline in sales for the month of February and has revised its projected sales growth for the year, now expecting a modest increase of around 1%.
February’s downturn was attributed in part to unfavorable weather conditions, which dampened demand for seasonal apparel. However, Target’s Chief Financial Officer Jim Lee acknowledged that a deeper issue is at play: weakening consumer confidence, which has affected discretionary spending across the board.
Adding to its troubles, Target has drawn criticism for its decision to scale back DEI-related programs. Shortly after President Trump took office, the company announced that it would eliminate hiring targets for minority employees, dissolve an executive committee dedicated to racial justice, and restructure other diversity-focused initiatives. While Target maintains that it remains committed to fostering inclusivity, its leadership has emphasized the need to align corporate policies with the evolving social and political landscape.
These changes have provoked a strong reaction from progressive consumers, particularly among Black shoppers, leading to widespread calls for a boycott. Rev. Jamal Bryant of New Birth Missionary Baptist Church in Stonecrest, Georgia, has spearheaded one such effort, urging 100,000 individuals to join a 40-day boycott of Target starting on Wednesday to coincide with the beginning of Lent. As part of the initiative, participants are being encouraged to shift their spending toward Black-owned businesses.
There are indications that this backlash is already having a tangible impact on Target’s customer traffic. According to data from Placer.ai, a firm that tracks retail foot traffic using mobile location data, visits to Target stores have declined more sharply in recent weeks compared to competitors such as Walmart and Costco.
During the week of February 17, the most recent data available, foot traffic at Target dropped by 7.9%, while Walmart saw a smaller decline of 5.2%. In contrast, Costco—one of the few major retailers that has maintained its commitment to DEI initiatives—actually experienced a 4.8% increase in visits.
Joseph Feldman, an analyst at Telsey Advisory Group, pointed to this trend as evidence of the fallout from Target’s policy shift. “The data indicates a clear drop in customer engagement beginning in late January and continuing into mid-February, which closely aligns with Target’s move away from DEI commitments,” Feldman wrote in a recent note to clients.
As Target navigates these turbulent waters, it now faces a dual challenge: managing the immediate financial pressures brought on by tariffs while simultaneously addressing a growing rift with segments of its customer base. With rising prices on the horizon and mounting scrutiny over its corporate policies, the retail giant finds itself at a critical juncture—one that could shape its future standing in an increasingly competitive and politically charged marketplace.
