Companies Warn of Price Hikes Coming From Tariffs

Retailers Target and Best Buy, and shipping giant Maersk, warned of price increases coming soon — a matter of days, in some cases — as a result of the 25% tariffs that went into effect at midnight on Tuesday, part of President Donald Trump's pledge to cut down on fentanyl trafficking from Canada and Mexico.

Further, the U.S. slapped an additional 10% tariffs on Canadian energy products while another 10% was placed on Chinese goods. 

Canada launched retaliatory tariffs on the U.S. overnight; Mexico said its retaliatory tariffs will go into effect on March 9; China announced new tariffs on the U.S. beginning March 10, CNBC reported. 

Target CEO Brian Cornell told CNBC American consumers will see price hikes "over the next couple of days" and that the company will likely have to raise prices on fruits and vegetables as soon as this week.

"If there's a 25% tariff, those prices will go up," Cornell said.

Maersk President Charles van der Steene said the result of Trump's tariffs is "inflationary in its essence."

"The short-term effect of any tariff clearly is inflation," van der Steene said, according to CNBC, adding that eventually, "the expectation is that the effect will ultimately soften."

Best Buy CEO Corie Barry said price increases for Americans are "highly likely" given that China and Mexico are the top sources for consumer electronics, CNN reported.

"We've never seen this kind of breadth of tariffs. This, of course, impacts the whole industry," Barry said on a call with analysts Tuesday, according to CNN.

U.S. reciprocal tariffs will begin April 2, and those could include Canada. Trump responded to Canadian Prime Minister Justin Trudeau's retaliatory tariffs with a vow to exact reciprocal tariffs.

"Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!" Trump wrote on on Truth Social.

Commerce Secretary Howard Lutnick told CNBC on Tuesday that reciprocal tariffs are coming.

"These countries have used us and abused us," Lutnick told CNBC. "That is going to change. It's unbelievable the way we get ripped off around the world and Donald Trump is going to level set it, make it reciprocal and make it fair."

Meanwhile, retailers are trying to figure out in real time how to contend with cost increases.

"We have $3 Christmas ornaments. We don't want to have $3.60 Christmas ornaments. We want to keep them at $3. That means we have to think about margin elsewhere. So maybe we'll take pricing up a little bit on stockings to cover where we are in Christmas ornaments," Target Chief Commercial Officer Rick Gomez said during an investor call, CNBC reported.

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