The Trump administration’s 25 percent tariffs on all goods from Canada and Mexico are prompting retaliatory measures amid a brewing trade war.
During his primetime address on March 4, Trump noted that his new tariffs might cause “a little disturbance” but argued that it would be worth it for the eventual benefits he claimed his aggressive trade policy would bring.
“Tariffs are about making America rich again and making America great again. And it’s happening, and it will happen rather quickly,” he claimed.
“There will be a little disturbance, but we’re okay with that,” said Trump. “It won’t be much.”
But CEOs of several large companies have warned that Trump’s tariffs may be devastating for their industries.
Starbucks
CEO Brian Niccol said in October that the company would not increase menu prices during its 2025 fiscal year, which comes to an end at the end of September, The Seattle Times noted.
Starbucks uses an intercontinental supply chain for its coffee, and it has a worldwide base of customers. Economists have said that coffee would be affected by the tariffs on Mexico. Trump also threatened Colombia, which produces coffee beans, with tariffs earlier this year.
The second-largest market for Starbucks after the U.S. is China. In a November regulatory filing, the company stated that government regulatory reform connected to tariffs, which would affect global markets such as China, may raise costs.
“Due to the significance of our China market business units for our profit and growth, we are exposed to risks in China,” the filing stated.
Target
CEO Brian Conrell told CNBC on March 4 that produce prices are likely to rise in the next few days because of the tariffs on Mexico.
He added that Target depends on Mexican produce in winter and tariffs could push the company to raise its prices on vegetables and fruits soon.
“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 the network.
“If there’s a 25% tariff, those prices will go up,” he added.
Cornell noted that prices may rise for things like strawberries, avocados, and bananas.
Ford
Last month, CEO Jim Farley said at an investor conference that the threat of tariffs was leading to chaos in the auto industry and that it would have devastating effects for U.S. car producers.
“Let’s be real honest, long-term, a 25 percent tariff across the Mexico and Canadian border will blow a hole in the U.S. industry that we have never seen,” said Farley, according to NBC News.
A report from the Anderson Economic Group found that the tariffs could add as much as $12,000 on top of the price of a new vehicle.
However, on March 5, Trump granted U.S. automakers a one-month delay on the new tariffs put in place against Canada and Mexico.
Monster Beverage
Co-CEO Hilton Schlosberg told analysts in a company earnings call on February 27 that "as regards tariffs, I think your guess is good as mine. Things keep on changing day by day.”
Other executives have also shared their frustration with the White House and the administration’s numerous changes on policy and company leaders have been trying to satisfy investors by saying that they will be able to mitigate or pass on the costs that any new policy might bring.
Best Buy
In a post-earnings call on Tuesday, Best Buy CEO Corie Barry said, "We prefer not to raise prices, but because of the higher cost of goods sold, we need to enact some price increases.”
"The giant wildcard here obviously is how the consumers are going to react to the price increases,” Barry added.
Chipotle
CEO Scott Boatwright told NBC News on Sunday that the company intends to absorb the costs of any new Trump policies.
“It is our intent as we sit here today to absorb those costs,” said Boatwright, but he added that changes in prices could come if higher costs turn into a “significant headwind.”
“We are fortunate to have such an extraordinary economic model at Chipotle that we can withstand those types of inflationary pressures and not have to pass those costs off to the consumer,” he added. “And that’s our intent this year. Let’s hold pricing constant, because we don’t know if the tariffs are transitory, if they’re going to be permanent, how sticky they’ll be in the new administration.”
“We don’t think it’s fair to the consumer to pass those costs off to the consumer, because pricing becomes permanent. And so again, back to the idea of delivering extraordinary value to the consumer. We’re going to stay the course,” he added.
