Target CEO warns of price hikes on produce in coming days following Mexico tariffs
Americans can expect to pay higher prices in the coming days for produce such as strawberries, bananas and avocados that are imported from Mexico as President Trump’s tariffs go into effect on Tuesday, according to Target’s chief executive officer.The Minneapolis-based retailer warned that new tariffs and economic uncertainty would pressure its first-quarter profits, as consumers continue to pull back on spending.Target CEO Brian Cornell expressed concerns about the impact of rising duties, particularly on key grocery items, and cautioned that the year ahead would be challenging for the retailer.Prices could increase over the next couple of days for seasonal produce such as avocados as the company depended on Mexico “for a significant amount of supply” for those categories, Cornell told CNBC.Cornell said Target relies heavily on Mexican produce during the winter months, and the tariffs could force the company to raise prices on fruits and vegetables as soon as this week.“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 told CNBC in an interview after Target released its fourth-quarter earnings.“If there’s a 25% tariff, those prices will go up,” Cornell added.The retail giant’s outlook came as new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, alongside a doubling of duties on Chinese goods to 20%.
Target’s warning aligns with that of fellow retail leader Walmart, which has also voiced concerns about persistent inflation and the chilling effect of tariffs on consumer demand.Non-essential categories such as home furnishings and electronics — comprising more than two-thirds of Target’s sales — have already seen weakened demand, a trend that could worsen in the coming months.Despite these challenges, Target’s stock rose about 1% in premarket trading after it posted stronger-than-expected holiday quarter earnings.
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