The U.S. retail industry will try to fight the negative impact of tariffs on Chinese and other imports the same way it fought and defeated a border-adjustment tax proposed by President Donald Trump that would have led to higher costs for imported goods, Target CEO Brian Cornell said Tuesday.
Target's CEO says retail industry will fight negative impact of tariffs
Cornell spoke at a reception on Capitol Hill hosted by the Economic Club of Minnesota.
June 20, 2018 at 2:16AM
"We're trying to make sure people understand the implications [of tariffs] as we did with the border-adjustment tax," Cornell told the Star Tribune in an interview shortly before he spoke at a Capitol Hill reception hosted by the Economic Club of Minnesota. "We really want to make sure we're getting those messages out."
Right now, average Americans may not understand the tariffs proposed by Trump could raise consumer prices, particularly at retailers such as Target which import much of their inventory from China, said Cornell.
"They are not seeing prices going up," he noted. "There's speculation. But I don't think the core consumer has been able to figure out what this means for me."
Cornell, who chairs the board of the Retail Industry Leaders Association (RILA), said the trade group will take a wait-and-see approach on a strategy to Trump's most recent threat to place protectionist levies on $200 billion worth of unspecified Chinese products imported annually to the U.S.
"Until we see the final plan, it's hard for us to react to it," Cornell said. "But we're watching it carefully to see what categories [of products] are going to be affected."
If the products include clothes and housewares, shoppers at Target and many other U.S. retail chains could be looking at paying more for their basic needs.
The newly threatened tariffs would add to a 25 percent tariff the president has already placed on $50 billion worth of Chinese products. All of the tariffs are designed to punish the Chinese for intellectual-property theft and the forced partnering and sharing of U.S. technology with Chinese companies by American businesses doing business in China, as well as a host of unfair trade practices that the White House said have contributed to a U.S. trade deficit with China.
The ultimate aim of the tariffs is to make more U.S. businesses buy and sell American-made products, eventually creating jobs and raising wages.
Critics of the Trump trade plan, which also includes tariffs on steel and aluminum imported from many of the U.S.'s most loyal allies, said the tariffs will cost American consumers and hurt more domestic industries than they help.
Cornell told the Economic Club audience that retail sales are good and growing at Target. Consumer confidence is high, and unemployment is low. The only thing that can disrupt the positive trend, said Cornell is a "price increase in the core essentials."
"We're trying to make sure there are no dramatic changes in the pricing environment," Cornell told the audience.
Yet that is what tariffs could portend. The countries that the U.S. has chosen to tax are in the process of threatening or imposing retaliatory tariffs on U.S. products. With each round of tariffs, fear of a trade war rises.
Cornell visited the White House with a group of CEOs and met with Trump during the border-tax fight. He has not been invited back to discuss tariffs. But he has been plenty busy in the nation's capital since Trump took office.
That situation likely will not change as he works to head off trade-related price increases before they can take effect.
"We're trying," he said, "to get the facts in place."
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