Target Announces Price Increases Due to Trump Tariffs

Who doesn't love a quick trip to Target? But if you've ever been to Target, you probably know that that "quick" trip can become a longer and more expensive one. That's because Target has it all - clothes, home decor, groceries, toys, and more.

It's easy to lose track of time in a store like this, and to get hit with the harsh reality of the bill after throwing this and that into the cart.

Well, your trip to Target might be changing as soon as this week as the store's CEO, Brian Cornell, announced price increases could happen sooner than expected due to new 25% tariffs Trump set on Canada and Mexico.

Get Ready to Pay More For Less

Trump's tariffs took into effect on Tuesday this week, which slapped extra taxes on imports for Canada, Mexico, and China. However, Canada and China soon retaliated with their own tariffs on American goods, and Mexico is planning their own retaliation too.

While the Trump administration claims the tariffs are necessary to help stop the flow of fentanyl into the U.S., over 40% of all U.S. goods are imported from the three countries.

Some of the goods that could get more expensive at Target as early as this week are fruits and vegetables. Brian Cornell stated that Trump's tariffs on Mexico could force the company to raise prices on produce since they rely heavily on imports from the country during 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,” Cornell said.

Not only will the tariffs affect the consumers, but they're also expected to impact Target's profits this quarter.

Is Target Losing Business?

According to Placer.ai., which uses phone location data to track visits, Target along with Walmart and Costco have seen visits slow down over the past month, however, they have dropped mostly at Target.

During the week of February 17th, Target foot traffic dropped by 7.9%, and Walmart dropped by 5.2%. Interestingly, Costco food traffic has increased by 4.8%.

While this slowdown could be attributed to weather, the economy, or other factors, there is one factor that should be considered.

During Trump's first presidency, he was working to eliminate DEI - diversity, equity, and inclusion initiatives. Now that he's back, his goal has been to get rid of it completely.

Before the president addressed Congress on Tuesday, he announced his administration had successfully eliminated DEI.

"We have ended the tyranny of so-called diversity, equity and inclusion policies all across the entire federal government and, indeed, the private sector and our military," Trump said. "And our country will be woke no longer."

Only hours after he was sworn in for the second time on January 20th, 2025, Trump started to issue executive orders to dismantle programs and pressure federal contractors to end "illegal DEI discrimination."

In response, Target announced it was eliminating its goals for hiring minority employees. The store received backlash and boycott calls, particuarly from black consumers.

For example, Rev. Jamal Bryant of New Birth Missionary Baptist Church in Stonecrest, Georgia, had asked for 100,000 people to start a 40-day boycott of Target on Wednesday to coincide with the start of Lent. People who decide to participate have been encouraged to buy from Black-owned businesses during the 40 days.

Since Target's decision, the data has shown a significant drop in traffic from January to February, according to Joseph Feldman, an analyst at Telsey Advisory Group.

Who Else is Raising Prices?

While Target has been transparent about their price hikes, it's not the only store feeling the pressure. Best Buy has also announced price increases will be coming soon.

The tariffs are likely to drive up prices on a range of electronics, from laptops and tablets, smartphones, and video game consoles.

According to the Joint Economic Commitee, computers, phones, and other electronics could see a price increase of 11%.

Any extra costs on U.S. imports from Mexico, Canada, or China "will be shared by our customers," Best Buy CEO Corie Barry told investors in the company's earnings call in November, adding that "there's very little in consumer electronics space that is not imported."

Not every company plans to increase their prices from the tariffs. Chipotle is one of the brands that intends to absorb the extra cost to avoid making their customers pay more.

Whether the retailer decides to eat the cost or make the consumer pay more, things are going to get more expensive.