Best Buy and Target CEOs say prices are about to go up because of tariffs
223 comments
·March 5, 2025captainkrtek
throwaway48476
Volatility is profit for insiders.
neilv
Is the market actually disciplining?
Or are Wall Street actors gaming the volatility for further profit?
Or both?
esalman
Strongly believe it's the second.
Just learned from Twitter tariffs will be rolled back in a day or two.
bamboozled
It was a nice 4 years...
bamboozled
It was a nice 4 years
MrMcCall
"It used to be simple: vote for the guy you liked the most. Then it became vote against the guy you disliked the most. Now it's vote for who you dislike the least." --A Whitney Brown
I remember seeing that on SNL in the 80s; it has always stuck with me.
wnmurphy
I heard he used to be _The_ Whitney Brown.
leptons
> Now it's vote for who you dislike the least.
For 1/3 of eligible voters, it's "I don't care about voting".
galimalint
[flagged]
esalman
4 out of those 5 headlines you listed are basically empty promises. Otherwise known as clickbait.
johnnyanmac
The 5th one is just outright misinformation. The title:
>DOGE says it's saved $105 billion, though it's backtracked on some of its earlier claims
toast0
> Illegal crossings at U.S.-Mexico border down 94% from last year, Border Patrol chief says
Economic migrants stop appearing when the future of the economy starts looking bleak. You can also make housing affordable by encouraging murders on the street.
scarface_74
TSMC announced investments in the US in 2020 and 2022.
It later came out that the DOGE numbers are innacurate. Even if they were accurate, the US budget is 7 Trillion. The tax cuts that Trump is proposing is much more than all of the cuts.
galimalint
the $100 billion investment in 2025 is new. the first investment in 2020 is also from trump first term.
doge has only been at work for 45 days, give it time. it's starting to look into military and medicare already.
zeroonetwothree
What year was that? 1999?
jameslk
This could be an interesting topic, but inevitably these posts devolve into politics and it’s always about the same thing. Yet this is the type of comment at the top. Why bother leaving a comment like this?
kadoban
You appear to be asking people to keep politics out of politics. What am I missing?
pfannkuchen
More like asking people to focus on the economic considerations because the political discussion is boring and repetitive, I think.
jameslk
Straw man
Ar-Curunir
You realize that the only reason this is a topic of discussion is because of politics, right?
jameslk
No? I see comments here discussing things other than politics
MichaelZuo
There rarely seem to be any substantive discussion in these types of threads, beyond vibes or repeating tautologies and talking points.
Over the past few months I doubt there have even been 10 discussions total with some non-circular, credible, arguments along with some coherent logic backing them…
Sabinus
Any bets on how this will be justified by Trump voters?
I'm thinking at first it'll be 'playing hardball negotiating tactic' and when it looks like the tariffs are here to stay 'paying more is patriotic'.
throwaway657656
"These are external taxes paid by the exporting countries. Beautiful tariffs will allow the US to eliminate the IRS and replace it with an ERS".
Basically no point in even having a conversation about it. The same way you don't discuss evolution with someone who thinks the universe is 6000 years old.
tombert
This is so frustrating, because of course manufacturing countries aren't going to operate at a loss, so whatever price increase that happens will be paid for by the consumer eventually.
And if they eliminated the IRS because the ERS covers all our expenses, that would effectively mean that we have shifted all of our income tax revenue away from relatively wealthy high-earners to the poor (who currently pay little to no income tax), since the poor have to buy items at the price they're listed.
throwaway48476
Who pays the tariff depends on the relative elasticity of supply and demand.
crazygringo
It is extremely rare for manufacturers to absorb the tariffs.
Profit margins in most industries simply aren't high enough to cover it. A business can't absorb 20-25% tariffs if its profit margin is only 5%.
And manufacturing is particularly known for its low profit margins.
So no. I mean, in theory you are technically correct. But the way elasticity works in practice is that the buyer is who pays the tariffs in virtually all circumstances.
mitthrowaway2
Is your reasoning that the supplier has the option of eating the tariff by cutting prices, such that the price paid by the purchaser remains the same?
If they had that much margin headroom available to cut prices by 20% and remain profitable, wouldn't that basically prove that they weren't dumping product in the first place?
insonable
sure, and a good baseline assumption for most consumer goods is that price elasticity of demand is pretty low in the short term, so consumers pay most of the tariff. then in the long run perhaps things change and more non-tariffed substitutes become available resulting in maybe a 50/50 split of "who pays" (after all, the substitutes didn't have comparative advantage before, so are probably a bit more costly to produce). in any case, total quantity sold will be less, consumers benefit less, and suppliers benefit less... but the government does get revenue.
baby_souffle
Can you give a few examples of this?
throwaway48476
Its very very stupid. Tariffs can work but not like this. A good tariff policy would be targeted at a strategic industry, have a long phase in period, and have a guarantee that it won't be removed quickly. Businesses don't like risk, especially if you want them to commit to building a new factory in the US with a decade long payback period.
johnnyanmac
well, going to r/conservative, top answer in a tarriff thread:
>To influence companies to produce their goods domestically instead of internationally. What is so hard to understand about this?
So they are stuck in Just World Land.
another top comment linked this: https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-pr...
So they more or less buy into "The extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl"
P.S. more than happy to take suggestions of a better forum representing conservative opinion
tmpz22
r/conservative is a bad litmus test. Between AI-driven bots (read comment histories!), flair-only posts, and chronically online users it's a terrible reflection of the average American who identifies as conservative.
We need to stop reaching for the easiest data source just because we're desperate for a data source. There's a reason great research is hard - mostly because it requires stupendous effort (and funding!) to get reliable results.
johnnyanmac
>We need to stop reaching for the easiest data source just because we're desperate for a data source.
I agree. Pretty much all internet sources are inherently biased due to response bias, so there's no fixing that without talking to such people face to face (which is a bit hard in my area).
But if you aggregate enough data you can at least start to see some sort of prevailing trends and sentiments. So I am open to better sources and some biased/compromised forums are still better that choosing to be trapped in an echo chamber. I have browsed around on other comments sections from news sources and the results unfortunately make Reddit look like a think-tank.
JeremyNT
> r/conservative is a bad litmus test. Between AI-driven bots (read comment histories!), flair-only posts, and chronically online users it's a terrible reflection of the average American who identifies as conservative
Sure, the average American who identifies as conservative just shows up every 4 years and hits the R without giving it much though. Thinking about them doesn't really give us much either.
I think /r/conservative tells us a lot, even if it's not representative of the constituency. The President is driven by memes and is extremely online. The "vibes" in /r/conservative (and on X, The Everything App) are extremely relevant, because these are the audiences Trump plays to.
bluGill
What ever happened to the free market consevatives? The ones who were proud to work with Clinton to pass NAFTA in the first place.
klipt
Heck Trump himself negotiated USMCA his last term and is now apparently reneging on his own agreement?
"A Trump never keeps his word"
"A Trump never pays his debts"
I don't know if it's dementia or if Putin has compromising info on him, but he seems intent on speed running the tearing apart of the west.
guyfromfargo
[dead]
balls187
They got tired of nonsensical progressive social policies and threw in their hat with a politician that wins, a lot.
Pre-Trump the 2nd, it seemed to me that conservative view-points were being “shouted down.”
Anecdotally I recall even on HN conservative views weren’t looked too kindly.
Remember that Google engineer who had an odd-take about less qualified Googlers, and getting ostracized for it?
llamaimperative
Nothing says “I need to relocate my supply chain” like 24 hours of tariffs
roshin
I didn't formally verify it, but during the Russian internet blackout, r/conservative was very quiet. I assume that the responses you read on that forum are not from actual US conservatives. After reddit purged most conservative subs (in 2 waves, when Trump 1 began and when Trump 1 ended), I don't think you'll find any conservative subreddits.
Unfortunately, I haven't found a forum that's accessible and with lots of conservatives. You have some on X and you have YouTube channels. Both are harder to engage with.
jeltz
Reddit purged them due to infections by what you complain about for /r/conservative.
SSchick
Plenty of videos around, default rethoric is to 'give them time, they said it would hurt at first' which sounds awfully close what people in abusive relationships would say now that I think about it.
MrMcCall
Or just very stupid, hateful losers.
wnc3141
When your'e deified, "god works in mysterious ways" sort of thing...
wnc3141
Fascism is not and never was about ideological coherence.
deepfriedchokes
I read an article, can’t find it now, that the Christian right believes Trump is basically a biblical messiah like Cyrus the Great from Isaiah 45. Basically a nonbeliever who God controls to help his people.
People believe what they want to believe.
codazoda
I haven’t paid attention to the politics here much, but isn’t driving up the price the point?
If you charge Canada a 25% tariff then products sold in the U.S. and shipped from Canada should cost U.S. consumers about 25% more. That, in turn, makes U.S. products look more attractive. A U.S. business pays taxes at the federal and state levels. A U.S. business also hires U.S. employees, who pay taxes as well and spend into the economy.
I’m sure I’m way over simplifying this, to the point of stupidity, but tariffs raise prices on foreign goods to encourage the sale and/or development of local goods, don’t they?
rsynnott
> I’m sure I’m way over simplifying this, to the point of stupidity
This is, to an extent, the problem, yes.
There are plenty of problems, but here's one very obvious one; your own industry almost certainly depends heavily on imports, particularly if you're a developed country. If you basically only have primary industry, then this sort of protectionism can _theoretically_ work and allow development of secondary industry (though in practice there aren't many examples of this), but for a developed country it really makes very little sense.
You're also assuming that local industry _will_ compete on price, versus just accepting the newly-set tariff-induced base price. That will happen in some cases, but not all; in particular for near-monopolistic industries (cars, a lot of heavy consumer goods like kitchen appliances), really, it makes a lot of sense for them to raise their prices under such circumstances.
dmalik
> I’m sure I’m way over simplifying this, to the point of stupidity, but tariffs raise prices on foreign goods to encourage the sale and/or development of local goods, don’t they?
What about all the businesses that export products or the ones that rely on imports. Businesses go bankrupt, prices go up for everyone and less people have jobs.
verdverm
We had to bail out soy bean farmers last time to the tune of $25B. That's just one instance of how they backfired and did more harm than good
theluketaylor
Way over simplifying.
A study was done on washing machine prices during tariffs of the previous Trump administration. Rather than undercutting foreign goods on price, local manufacturing raised their prices to absorb extra profit. As a kicker, the price of dryers also went up even though they were not subject to tariffs.
The US and Canadian economies have become deeply intermingled over generations. Many materials cross the border multiple times on the way to becoming finished goods and will be subject to tariff each time. There will be 2nd, 3rd, and 4th order effects for a long time even if these tariffs go away quickly, not to mention the poisoning of the closest relationship between nations the world has ever seen.
My fellow Canadians are horrified and enraged at the tariffs that amount to economic warfare and the continuous violations of our sovereignty. I have never seen the whole country this united on anything before. Canadians are furious and every grocery store has American produce rotting on shelves. We will not forgive and forget quickly.
sigmar
>Rather than undercutting foreign goods on price, local manufacturing raised their prices to absorb extra profit.
For another source on this point quoted above- (and for people that prefer video explainers) the wall street journal covered how domestically produced washers/dryers went up in price after those tariffs: https://youtu.be/_-eHOSq3oqI?t=102
HarHarVeryFunny
50% of fruit sold in US, and 60% of vegetables come from Mexico. How is US going to replace that in winter?
kieranmaine
Don't forget retaliatory tariffs impacting exporters. See
From "Donald Trump’s tariffs will bring ‘nothing but pain’ to rural America, farmers say - " https://www.ft.com/content/ba4569d3-3c54-47d9-90af-125751434...
"Trump’s last trade war, with China in 2018...led to $27bn in losses for US agriculture, according to estimates by farming groups..farms received as much as $23bn in compensation from the federal government"
klipt
If tariffs are such a great idea, should California slap tariffs on Florida oranges to protect its domestic orange growers?
fingerlocks
Oh they would have tried if it wasn’t for that pesky commerce clause in the constitution
throw0101a
> That, in turn, makes U.S. products look more attractive.
Unless they raise prices to get better margins since their competition has higher prices now. This is exactly what happened with Trump 1.0 tariffs: foreign product prices went up and so did domestic ones.
> A U.S. business also hires U.S. employees, who pay taxes as well and spend into the economy.
It takes time to on-shore, and until that happens the public is paying higher prices, potentially for a few years. So you take the total higher prices, and divide by the number of jobs created, and you can get the price per job. For washing machines it was $800K/job:
* https://www.nber.org/papers/w25767
There is an argument to be made that production capacity is strategic asset of course:
ipaddr
They also raise the price of local foods because the materials they import cost more.
dehrmann
I did start wondering what Trump (or any leader with loyal supporters) would have to do, or what outcomes supporters would have to see, to lose support.
speed_spread
The leader can do no wrong. All its decisions are justified and without nuance. The idea of questioning the logic doesn't even exist. It's a cult.
inverted_flag
Not sure about the higher prices, but the coming recession is being talked about in MAGA circles as a correction and a fault of the Fed.
tombert
Who would have thought that increasing the price of goods will lead to higher prices?
I'm not necessarily against tariffs, but I think it's idiotic to think that raising the price is going to somehow lower grocery prices.
Aloha
I'm pro tariff - but 25% tariffs are absurd, at most you need 10%-12% in narrowly targeted categories to ensure re-onshoring of production.
emodendroket
They're clearly thinking much bigger, like returning to a model where tariffs are the primary mode of funding the government, and nuking whole sectors/devaluing the dollar to make US exports more competitive with a desperate potential workforce. Not a particularly compelling plan in my view but it has its own internal logic.
chii
why would tariffs make US exports more competitive? It would make other countries under tariff to retaliate, which makes US exports less valuable.
Unless, of course, the US has some sort of monopoly on an export that others have no choice but to take. I dont think the US has such a resource.
Marsymars
I’m curious - I wouldn’t describe myself as “pro tariff” at all, but I can see a good case for them in a couple circumstances; 1) in cases where production is important for national security - e.g. sufficient production of Calories and 2) in cases where off-shored production isn’t meeting standards around human rights, environmental protection, etc.
Do you see a case for tariffs otherwise?
quelup
Honest question - can you not get these products from other stores or do all of them source products from Mexico and China? If so, it does seem like DOGE and other price saving initiatives will be closer to a net 0.
acdha
The supply chain has been global for decades, especially with the countries he targeted. It’s really messy with the North American free trade area since parts are shipped around a lot as they get made and assembled and all of those supply chains break in odd ways if there are customs delays. People are predicting that will add something like $3-10k to the price of a new car:
https://apnews.com/article/tariffs-cars-automakers-trump-can...
https://www.nytimes.com/interactive/2025/03/04/business/econ...
In many cases, the U.S. no longer has manufacturing capacity in certain markets so the most likely outcome is simply that prices go up or manufacturing shifts to other countries like Vietnam, especially in an uncertain economic climate where companies aren’t jumping to take on debt chasing demand which could disappear at any time.
One other area where we don’t have alternatives: Mexican agriculture - their growing season is longer and that means American consumers either aren’t getting things out of season or are paying more for things like greenhouse crops.
verdverm
Or could be net negative if there are a bunch of wrongly termination suits and settlements, or it actually costs the govt more because they now have to outsource work to private companies be wise they fired too many people who were in fact doing useful work
You cannot go into a large org and understand what is and is not working in a few weeks. DOGE has been sloppy and largely more political theater this far
scarface_74
The entire supply chain is global.
aussieguy1234
What's the impact here on inflation, by extension interest rates and funding available to startups?
msy
Near term inflation but more broadly increasing paralysis of business investment of all stripes in the fact of a wildly unpredictable political landscape.
rogerrogerr
The general path of the country is fairly clear at this point - business that manufacture closer to consumers will have fewer issues with the government. Even Biden kept a bunch of Trump1 anti-China policies in place.
If I was directing investment at a large business, onshoring manufacturing would be a no brainer in many businesses. Mexico might be the happy medium, but I’d really push for US manufacturing facilities with high automation levels to hedge against labor cost.
throwaway48476
Most of the post 2016 China exit investment was to other cheaper southeast Asia countries. My phone was made in Vietnam.
verdverm
If it is half the cost to produce it over seas, 25% more is still much less than on shoring. On shoring is more than just the CoG, it requires capital investment which may no longer be needed in a year or four. It's not a simple or no brainer decision for most of the tariff targets with them being so broad
tmpz22
Massive wealth redistribution to the ultra-wealthy over the next 4 years. The ultra wealthy will need to find new places to invest their capital, so some form of startup funding will remain available even as research funding dries up.
Creating startups will be easier as more Americans will be looking for work, leading to depressed salaries.
aninteger
I guess it's time to print out those "I did this!" stickers of Trump and put them next to the price tags.
defrost
There's always John Walker's OG
The One, The Original, The Prophetic (July 1990), The Authentic “Evil Empires: One down, one to go…” bumper sticker, anticipating the obsolescence of railroad era continental-scale empires in the information age.
Too soon?
zoklet-enjoyer
Haha yep, I designed one when he announced the tariffs the first time but never got around to printing them.
tombert
Would you mind sharing the design?
JKCalhoun
You can just purchase them: https://www.amazon.com/200pcs-Tariff-Stickers-Merchandise-An...
beefnugs
I wish humans were better at coordination, or instead of "social media" people got addicted to social bargaining: because this would be the perfect time for a united consumer front, demanding that that big companies take more of a hit from their profit margin than from employee wages or raised prices. Threatening to starve out a company if it doesn't implement these tariff increases in a more reasonable way than the entirety of capitalism history would be the only way to turn around the avalanche it has been
slavik81
If the citizens of the United States were capable of coordinating to threaten anyone, it should be their government into recinding these new taxes.
rsynnott
> Threatening to starve out a company if it doesn't implement these tariff increases in a more reasonable way than the entirety of capitalism history would be the only way to turn around the avalanche it has been
I mean, depends on the industry, but for instance take Target. Its profit margin is 3-4%, and that was in 2024, which was, really, pretty good times, all things considered. It doesn't have much room to absorb source price increases. Few industries dependent on imports do.
anthuswilliams
I'm no fan of tariffs, but oh please. Last time their prices went up because of COVID and because of supply chain disruptions. Now they are going up because of tariffs. All of their earnings calls are filled with analyses of their "pricing power" i.e. the degree to which they can pass on these costs to customers. But when the costs decline, they are happy to keep the prices inflated and pocket the profits.
benced
Costly events occurred… so costs went up. Best Buy’s profit margin hovers around 3% and Target’s around 4%, they’re not raking in money.
rsanek
low net profits margins are simply how retail works, it's not news that retail requires scale. and in fact both target and best buy did see record profits shortly after the pandemic started.
johnnyanmac
Yeah, that's the trap many people don't realize. price almost never come down after inflation.
If you want that, you need deflation. And I'm not sure at this point if that's a better move than what's going on now.
Workaccount2
Consumer spending was shattering records during the pandemic.
If consumer spending was dropping as prices were going up, then sure, greed. But prices were rising and consumers were relentless. Which is totally logical. Even more logical when the "spending class" was getting massive raises/offers and rock bottom credit.
null
trhway
other thing which may happen is that businesses would start to behave like the ones in say Russia and the likes - utilizing long opaque subsidiaries and shell corp chains, some being just a paperwork, to "manage" the tariffs . The double Dutch would look like a child play. Once such [quasi]corruption starts it would be pretty hard to wean companies off it if/when things get back normal.
mlinhares
Nah, you just pay the powers that be to exclude you from the tariffs, Apple has been excluded from the current ones. So only those that are not friends with the kleptocracy are really at risk.
As for the rest of the population, it's the usual FAFO, not much to do.
darig
[dead]
vachina
Reminder to decouple from the US, because they’re gonna export this tariff (ie pass the cost) to the rest of the world.
davidw
How would you actually go about doing that? Like if the US economy implodes because enough of this malarkey breaks it, what/where is safe? In terms of your personal wealth/residence, I mean.
The only thing I can kind of think of is maybe some land or housing in Europe or New Zealand or somewhere kind of out of the way; perhaps something that you can rent out. Might not make you a ton of money, but it would hopefully hold its value over time?
toomuchtodo
We own a modest flat in Spain. I’ve moved a year’s worth of living expenses to EUR. I can have my family out of the country in 72 hours. Total cost was under $300k USD.
The best time to have a plan is before you need it. If you wait until you need it, you’re too late.
(n=1, ymmv)
davidw
> I can have my family out of the country in 72 hours.
I was thinking out loud about this on a reddit thread, kind of going through my idea of different scenarios. "Maslow's hierarchy of GTFO".
As in... if you're in 1930ies Germany, you get out with whatever you can take, but you get out ASAP.
If you're in, say, Hungary... you don't really need to rush your exit. You might find the politics unpleasant, but you can leave whenever and take the time to take your stuff with you.
null
a2tech
Who did you use to make the international purchase? I have a friend that used the lady from house hunters international but she’s French focused and that’s not for us
strken
How much does this cost you on an ongoing basis, if you don't mind me asking?
throwaway48476
Bullets have been a good investment.
Sure miss the days where there wasn’t headline generating chaos from the White House resulting in market volatility. Make Government Boring Again.