Home Depot, Walmart, and the Trump Administration: Implications for American Business and Consumer Product Choices and Taxes on High-Energy Products
Some Home Depot product choices could have to be changed due to the possibility of a tariffs, while some individual Home Depot prices could increase. There are some things that are not logical that will end up going away.
The country’s largest home improvement chain weighed in during a call with investors about its earnings report, just days after Walmart drew President Trump’s ire with a warning that his sweeping import taxes are pushing the world’s largest retailer to increase its typically low prices.
Home Depot executives acknowledged their advantageous position in the retail world: The chain is massive, with tremendous power in the market. It already sources more than half its items from the U.S. and does not sell food.
Although Trump says foreign countries should pay for his tariffs, it’s U.S. businesses that get the tariff bill when they claim their imported goods at the border. Under a current temporary deal, U.S. levies on Chinese imports are 30% instead of the previous 145%. A new 10% import tariffs have been imposed on global imports.
Walmart and its suppliers have already absorbed some tariffs, said CEO Doug McMillon. He said that Walmart couldn’t do that with the whole amount because of the tariffs.
“However, we aren’t able to absorb all of the pressure given the realities of narrow retail margins,” Mcmillon said.
The Trump administration also previously accused Amazon of “hostile and political” moves after news reports suggested the retailer might display new tariff costs on its low-cost marketplace called Amazon Haul. Amazon denied having a plan after a phone call between Jeff Bezos and Donald Trump.
After the company said it would raise prices on some toys due to tariffs, Trump threatened a 100% tax on Barbie-maker Mattel. “He won’t be selling a toy in the US,” Trump said.
The Target Expansion in the Lowe’s Effect: An Investor’s Perspective on Home Improvement and Wall-Centric Real Estate
Ted Decker’s CEO told investors that the company had a different use case for expenditure in home improvement. “Our customer is in a good spot right now.”
In the third quarter, home improvement chain’s sales were up 2% as people undertook smaller-scale projects. Many people are postponing renovations due to the high mortgage rates in the U.S.
Despite warnings of a possible recession, the US economy was “well past” those predictions thanks to strong employment levels, inflation and lower gas prices.
On Wednesday, rival Lowe’s is expected to address tariffs when it reports earnings. When shoppers tighten their budgets, Target usually relies on more people buying clothes, cosmetics and other non-necessities that often get skipped.
As major retailers grapple with the cost of President Trump’s tariffs, they have to fight two battles at once; one publicly and one privately, without offending the White House or alienating customers.
“We have many levers to use in mitigating the impact of tariffs, and price is the very last resort,” Target CEO Brian Cornell told investors on an earnings call on Wednesday. The other levers include negotiating with suppliers, changing up product selection, shifting where items come from and reshuffling the timing of orders.