Prices for popular fruits such as strawberries, avocados, and bananas are expected to rise as new tariffs take effect. President Donald Trump’s administration has imposed a 25% levy on imports from Mexico and Canada, which came into force on Tuesday. Brian Cornell, CEO of retail giant Target, has warned that these tariffs will inevitably lead to higher prices for produce.
Target has been strategically reducing its reliance on Chinese imports, decreasing from over 60% to approximately 30%. Despite this, the new 10% duty on Chinese goods, implemented alongside the tariffs on Mexico and Canada, adds another layer of complexity for retailers. Target, which depends heavily on Mexican produce during the winter months, may have to adjust prices upwards as soon as this week.
Consumer confidence has taken a hit, with February marking its lowest level since 2021. The economic climate remains challenging as high costs for food and housing continue to strain consumer budgets. Although inflation has shown signs of easing recently, it has not slowed at the pace anticipated by the Federal Reserve. This backdrop fuels concerns among households that these tariffs will further escalate living expenses.
Cornell addressed these issues in a recent interview following Target's announcement of its fourth-quarter earnings. He noted that while the cumulative 20% duties on goods from China were concerning, the immediate impact would be more pronounced on Mexican produce. This shift could see shoppers facing price hikes in grocery aisles sooner rather than later.
The imposition of these tariffs raises fears across the retail sector and among consumers alike. As costs increase, retailers like Target may struggle to maintain competitive pricing without passing some of the burden onto consumers. This dilemma highlights the broader economic implications of trade policies in an interconnected global market.