President Trump has followed through with his plans for levying import tariffs of 25% on goods from Mexico and Canada and adding an additional 10% for a cumulate addition of 20% tariffs on Chinese imports. The reasons are attributed to curbing the inflows of fentanyl across borders, boosting American manufacturing national security and balancing trade deficits. The retail/wholesale sector appears to be particularly exposed to tariffs.

Let’s take a look at what CEOs of leading retailers are saying about import tariffs and their impacts and ways to mitigate them.

Target: Avocados and Tomato Prices Will Rise, But Chinese Imports Fall to 30%

Discount retailer Target Co. (NYSE: TGT) CEO Brian Cornell expressed in a CNBC interview after its Q4 2024 earnings results. He noted the cautious state of the U.S. consumer shopping carefully and stretching their budgets carefully looking for value. It’s not “new news” that the consumer is under pressure.

Consumer confidence has fallen, and concerns about tariffs are a reason. The company depends on Mexico for a significant amount of supply, which are categories they will try to protect on pricing.

Cornell stated, “The consumer will likely see price increases over the next couple of days." In reference to tomatoes, avocados, bananas and strawberries from Mexico. Target has been consciously sourcing its products domestically, and now, half of its goods come from the United States.

Imports from China have shrunk from 60% to around 30% as they diversify their supply chain on a path to 25%. However, it’s not the first time they’ve dealt with tariffs and will react accordingly.

Walmart: Trying to Pass the Impacts Onto Chinese Suppliers

The world’s largest retailer and America’s largest importer, Walmart Inc. (NYSE: WMT), has warned for the first time in three years that sales will slow as consumers budget for higher-priced groceries. While most of its products are sourced domestically, it won’t be immune to import tariffs.

Walmart is forecasting 2025 sales growth of 3% to 4% versus consensus analyst estimates of 4.6%. CEO Doug McMillon said the company has managed tariffs in the past and will continue to manage them.

Using its massive scale for leverage, Walmart has asked some of its suppliers in China to cut their prices by 10% to offset the impacts of Trump tariffs.

According to Bloomberg, Walmart is negotiating with individual manufacturers. However, even Walmart's massive size is not convincing enough, as "few have acquiesced" due to the razor-thin margins (2%) that suppliers are making off their imports.

Best Buy: China and Mexico Are the #1 and #2 Import Sources

Big box consumer electronics giant Best Buy Inc. (NYSE: BBY) mentioned the word “tariff” 27 times during its fourth quarter 2024 conference call, much more than The Gap, which mentioned it only three times. CEO Corey Barry noted right from the start that international trade is "critically important" for its business and industry.

China and Mexico are the number one and number two sources for their products. Best Buy only imports 2% to 3% of its overall assortment of products from those countries, but 20% of its vendor profile is from Mexico. CEO Barry then mentioned in the conference call that a large percentage of its private-label large-screen TVs and appliances are sourced from Mexico.

Best Buy expects suppliers to pass along "some level of tariff costs to retailers, making price increases for American consumers highly likely.” Best Buy didn’t include the impact of tariffs in their guidance. Still, if China tariffs of 10% enacted on February 4, 2025, remain in effect, then their comparable sales would be impacted by a negative 1 point.

Meanwhile, China’s tariffs were raised another 10% on March 4, 2025, but it's not a linear case of doubling the impact to 2%, according to Barry.

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