New York — As the U.S. government moves forward with aggressive trade policies that impose steep tariffs on imports from Mexico, Canada, and China, American consumers and businesses alike are bracing for immediate economic consequences. Retail giants such as Target and Best Buy are already preparing for a rise in costs that will inevitably be passed on to shoppers, with Target CEO Brian Cornell warning that price increases could take effect in just a few days. The retailer now finds itself in the middle of a perfect storm, not only struggling with the financial impact of trade tensions but also contending with growing public discontent over its recent retreat from diversity, equity, and inclusion (DEI) initiatives.
The new round of tariffs, introduced by the Trump administration, includes a broad 25% tax on goods imported from Mexico and Canada, which officially took effect on Tuesday. Simultaneously, the tariff on Chinese imports has doubled from 10% to 20%, placing additional pressure on American companies that rely on foreign supply chains. These new duties add to the already existing tariffs on hundreds of billions of dollars in Chinese goods, escalating tensions between the United States and its largest trading partners. In retaliation, both China and Canada have imposed their own tariffs on American exports, and Mexico is expected to follow suit with countermeasures in the coming days.
The Trump administration has justified the tariffs as a necessary step in the fight against the illegal importation of fentanyl, a powerful synthetic opioid that has contributed to the ongoing drug crisis in the United States. However, economists warn that the broader economic consequences could be severe, particularly for industries that rely heavily on imports. American retailers, already grappling with shifting consumer behaviors and inflationary pressures, now face an additional financial burden that will likely be transferred to consumers in the form of higher prices.
Target, one of the country’s largest retailers, is among the first to acknowledge the immediate impact these trade policies will have on pricing. In an interview with CNBC, Cornell explained that fresh produce would be among the first categories affected, particularly during the winter months when the company depends heavily on agricultural imports from Mexico. “We are working closely with our suppliers to minimize the impact, but in certain categories, like fresh fruits and vegetables, price increases will be unavoidable,” Cornell stated. “Shoppers should expect to see adjustments at checkout within the next few days.”
The financial uncertainty created by the tariffs has made it increasingly difficult for Target to forecast its profitability for the coming quarters. While the company remains focused on long-term stability, executives have acknowledged that the unpredictability of trade policy will play a significant role in shaping their financial outlook.
Best Buy, another major retailer with significant exposure to international supply chains, is also feeling the strain. The company’s CEO, Corie Barry, highlighted the unprecedented nature of the current trade environment, noting that China and Mexico are two of the most critical suppliers in the consumer electronics sector. “We have never experienced tariffs on this scale before, and this will impact the entire retail industry,” Barry explained during a recent earnings call. “Many of our suppliers are already adjusting their pricing strategies, which means that American consumers will likely see higher prices on electronics in the near future.”
As Target grapples with the financial impact of tariffs, it is simultaneously dealing with an entirely different crisis—an intense backlash from consumers frustrated with the company’s decision to scale back its DEI initiatives.
Last month, Target announced that it would eliminate hiring goals for minority employees, disband an executive committee focused on racial justice, and scale back several other diversity initiatives. While the company has reiterated its commitment to fostering a welcoming and inclusive environment, the policy shift has been widely criticized by progressive customers, particularly Black shoppers who have historically supported the retailer’s DEI efforts.
Reverend Jamal Bryant, a prominent civil rights leader and senior pastor at New Birth Missionary Baptist Church in Georgia, has called for a large-scale boycott of Target in response to the changes. Bryant has urged 100,000 individuals to participate in a 40-day boycott of the retailer, aligning the protest with the religious observance of Lent. Consumers participating in the movement are encouraged to redirect their spending toward Black-owned businesses as a form of economic activism.
Early data suggests that the boycott may already be having an impact. According to retail analytics firm Placer.ai, which tracks store visits using mobile phone location data, foot traffic at Target stores has declined at a steeper rate compared to competitors. While Walmart and Costco have also seen fluctuations in store visits, the drop at Target has been more pronounced.
For the week of February 17, foot traffic at Target locations fell by 7.9%, compared to a 5.2% decrease at Walmart. Meanwhile, Costco—one of the few major retailers that has maintained its DEI commitments—saw a 4.8% increase in store visits.
Joseph Feldman, an analyst at Telsey Advisory Group, has pointed to these trends as an indication that Target’s policy shift is influencing consumer behavior. “The data shows a clear drop in customer engagement following Target’s decision to move away from some of its DEI initiatives,” Feldman wrote in a research note. “While external factors such as economic conditions and weather may also be playing a role, it is evident that this controversy is affecting foot traffic.”
With mounting financial pressures from tariffs and growing scrutiny over its corporate policies, Target now faces a complex set of challenges that will shape its trajectory in the months ahead. As the company works to maintain consumer trust and adapt to an evolving economic landscape, its ability to navigate these crises will determine its long-term success in an increasingly volatile retail market.
