Shoppers will likely see produce prices increase in the coming days due to President Donald Trump’s tariffs on Mexican imports, Target CEO Brian Cornell said Tuesday.
The Trump administration’s 25% levies on goods from Mexico and Canada, along with an additional 10% duty on Chinese imports, took effect Tuesday.
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 fiscal fourth-quarter earnings.
“If there’s a 25% tariff, those prices will go up,” Cornell added.
Cornell said prices could rise for produce like strawberries, avocados and bananas.
Target Corp. CEO, Brian Cornell speaks during an interview on the floor of the New York Stock Exchange November 28, 2014.
Brendan Mcdermid | Reuters
While inflation has eased in recent months, price increases have not moderated as much as the Federal Reserve has hoped. High costs for food and housing have continued to stretch consumer budgets, and Trump’s tariffs have raised fears that households will face even higher expenses. The president and his advisors have contended the duties will not raise prices for consumers.
The concerns about tariffs come after consumer confidence dropped in February to its lowest level since 2021.
Cornell said “there is some concern about tariffs” that adds to the pressure already facing consumers.
The Target CEO downplayed concerns about how the cumulative 20% duties on goods from China will affect shoppers at the company’s stores. Cornell said Target has reduced its reliance on China to about 30% of imports from more than 60%.
His comments come after Target posted fiscal fourth-quarter earnings and revenue that topped Wall Street’s expectations.
But the company also said it expects a “meaningful” decrease in first-quarter profit from the year-ago period as it deals with “ongoing consumer uncertainty,” weak February sales and tariff fears. Target’s guidance is the latest warning sign about the health of the economy, as it joined other retailers like Walmart, E.l.f. Beauty and Home Depot in giving weaker-than-expected first-quarter or full-year guidance.
