Retailers leery of additional tariffs

Despite strong sales, businesses worry that prices could increase

Tribune News Service

The potential impact of a new round of tariffs proposed by the Trump administration has loomed large over the retail industry the past week even as companies like Target and Home Depot have reported strong quarterly sales.

Retailers say they’re keeping a close eye on tariffs — both the tariffs already in place and a potential future round that could cover more consumer goods.

“As a guest-focused retailer, we’re concerned about tariffs because they would increase prices on everyday products for American families,” Target Corp. CEO Brian Cornell said Wednesday while discussing his company’s sales with analysts.

Mr. Cornell isn’t worried about Target’s ability to manage the impact on its business, saying the retailer is “continually developing and implementing contingency plans as we learn more and things evolve.”

But Target has been “expressing our concerns to our leaders in Washington,” he said.

The concern aired by Target and other retailers comes as the Office of the U.S. Trade Representative holds hearings this week on a proposal to extend tariffs to roughly $200 billion of additional Chinese goods. Those additional tariffs, meant to pressure China to change its trade practices, would be on top of tariffs imposed on $34 billion of mostly industrial goods in July and another $16 billion in tariffs expected to take effect this week. Several retailers have representatives speaking at this week’s hearings on the tariffs.

Dollar General, Five Below, Macy’s, J.C. Penney and Lowe’s have all said in the annual reports they file with the U.S. Securities and Exchange Commission that there’s a risk tariffs could affect their business.

Some, like Dollar Tree, said they rely on products made outside the U.S. About 40 to 42 percent of sales at Dollar Tree stores came from goods it imported. Even some of the products Dollar Tree buys from domestic vendors have been imported, the chain said.

Outdoor products could also be affected by additional tariffs, Vista Outdoor CEO Christopher Metz said.

“Just about everybody in the world” imports helmets from China, Mr. Metz said. “But helmets is one of those categories where it’s a safety category and it’s hard for us to believe that our government would want to put regulations and tariffs on a safety product.”

Mr. Metz said he thought his