From Tech To Retail, Many US Businesses See No Alternative To Raising Prices

As they have become increasingly dependent on global supply chains over the past 40 years - a phenomenon they initiated to keep costs lower - growing number of US businesses see no alternative to raising prices in response to Trump administration tariffs. 

While some will either negotiate with their foreign partners to share the absorption of cost increases - or simply 'eat' the tariff costs for some period of time, most appear to believe that they have no economic alternative but to raise prices for US consumers as their own costs are driven up by the tariffs. JL

Walter Einenkel reports in Daily Kos, Ayelet Sheffey and Catherine Boudreau report in Business Insider:

The Trump administration’s hefty tariffs against countries beyond China seem to have caught many companies by surprise. Major corporations like Apple and Nike bring in much (or most) of their manufacturing imports from countries that Trump has hit with high rates. While neither company has announced intentions to raise prices (yet), it seems inevitable to many analysts. At the end of 2024, some companies warned that they would consider raising prices on consumers if Trump implemented his broad tariff proposals. While it's still possible they could absorb some of the costs of the tariffs, here are the companies that have warned of price increases.

President Donald Trump’s decision to impose destructive tariffs against just about everybody on the planet quickly sent stocks plummeting and led to layoffs, prompting Trump’s rich allies to scramble and do damage control, albeit poorly.

Trump has long pushed his ill-conceived tariff plan. And even before “Liberation Day,” numerous companies have gone on the record about tariffs, saying they will pass (or have already passed) the costs on to consumers. 

Here are some of the biggest.

Best Buy

China and Mexico make up a combined 75% of Best Buy’s imported consumer electronics. CEO Corie Barry told analysts on a call in March, “We’ve never seen this kind of breadth of tariffs,” adding that “price increases for American consumers [are] highly likely.”

A sign stands outside a Target store on May 2023 in Nashville, Tennessee.

Target

In a March interview, Target CEO Brian Cornell explained that his company relied on imports from Mexico in the winter. “Those are categories where we’ll try to protect pricing, but the consumer will likely see price increases over the next couple of days,” he said.

Steve Madden

Shoe company Steve Madden has already said it plans to raise prices this year in response to Trump’s tariffs against China earlier this year. Now that Trump has added another 34% tariff on China, there’s a good chance prices will jump even higher.

 

Stanley Black & Decker

A woman carrying a child stands near Apple and Nike stores in Beijing, China, on April 4.

Stanley Black & Decker, the tool company, manufactures most of its products in facilities throughout Asia. CEO Don Allan gave a most diplomatic statement on tariffs during an earnings call in February, saying, “Our approach to any tariff scenario will be to offset the impacts with a mix of supply chain and pricing actions, which might lag the formalization of tariffs by two to three months, therefore limiting [profit and loss] headwinds in the near-term and maintaining our long-term margin objectives” (emphasis added).

Apple, Nike, and others

The Trump administration’s hefty tariffs against countries beyond China seem to have caught many companies by surprise. Major corporations like Apple and Nike bring in much (or most) of their manucturing imports from countries that Trump has hit with high rates. While neither company has announced intentions to raise prices (yet), it seems inevitable to many analysts. At the end of 2024, some companies warned that they would consider raising prices on consumers if Trump implemented his broad tariff proposals. While it's still possible they could absorb some of the costs of the tariffs, here are the companies that have warned of price increases.

Conagra

Conagra Brands CEO Sean Connolly told Reuters on April 3 that the food company may have to hike prices to offset the cost of tariffs on ingredients like cocoa, olive oil, palm oil, and a type of steel used for its canned products.

Connolly said that Conagra, which makes products such as Hunt's ketchup and Chef Boyardee, imports tin plate steel for its canned food and tomatoes from Mexico.

 

It was too early to tell how big price hikes on the company's food products would be, he added. During an April 3 earnings call, he stressed that the trade situation remains "volatile" and changes hourly.

Volkswagen

According to a memo first reported by Automotive News, Volkswagen said it would place an import fee on vehicles made outside of the US in response to Trump's 25% tariff on car imports.

The company said it would provide more details on its pricing changes in response to the tariffs by mid-April.

Walmart

Walmart CFO John David Rainey told CNBC on November 19 that the company will likely raise prices if Trump's tariff proposals are implemented.

"We never want to raise prices," he said. "Our model is everyday low prices. But there probably will be cases where prices will go up for consumers."

The company's CEO, Doug McMillan, said during a February earnings call that "tariffs are something we've managed for many years, and we'll just continue to manage that."

Columbia Sportswear

Tim Boyle, the CEO of Columbia Sportswear, told analysts on an October earnings call that the company was "very concerned about the imposition of tariffs. " He said that while he considered Columbia adept at managing tariffs, "trade wars are not good and not easy to win."

Boyle also told The Washington Post in October that the company was "set to raise prices."

"It's going to be very, very difficult to keep products affordable for Americans," he said. He later said in a February interview with CNBC that "we need some surety about what is going to happen" before making price changes.

AutoZone

Philip Daniele, the CEO of the auto-parts company AutoZone, told analysts on a September earnings call that tariff policies had "ebbed and flowed over the years," and if Trump implemented more tariffs, "we will pass those tariff costs back to the consumer."

"We generally raise prices ahead of that," Daniele said, adding that prices would gradually settle over time. "So, that's historically what we've done," he said.

Trump's 25% tariff on car imports is expected to increase manufacturing costs by anywhere from $4,000 to $12,000.

 

At this rate, it’s hard to imagine most companies not raising their prices if Trump’s tariffs remain in place, with the burden ultimately falling on working Americans.