First, it was Walmart. Now it’s Target.
The retailer warned Tuesday profits may fall short of projections thanks in part to uncertainty around President Donald Trump‘s tariffs.
According to a new report from Reuters:
“The Minneapolis-based retailer joined retail bellwether Walmart (WMT.N), opens new tab in raising caution about its expectations for the year as sticky inflation and tariffs on imports proposed and implemented by President Donald Trump temper demand, particularly for the non-essential categories like home furnishings and electronics that makes up more than two-thirds of Target’s sales.
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The disappointing outlook may reflect the mood of shoppers who in January pulled back spending far more than expected and showed that they are much more worried about the impact of tariffs on their wallets.
A spokesperson told the outlet: “'The company expects to see meaningful year-over-year profit pressure in its first quarter,‘ attributing the impact to tariff uncertainty, as well as weak demand for apparel and other discretionary products during February."
Trump’s long-threatened tariffs against Canada and Mexico went into effect Tuesday, putting global markets on edge and setting up costly retaliations by the United States’ North American allies.
Starting just past midnight, imports from Canada and Mexico are now to be taxed at 25%, with Canadian energy products subject to 10% import duties.
The 10% tariff that Trump placed on Chinese imports in February was doubled to 20%, and Beijing retaliated Tuesday with tariffs of up to 15% on a wide array of U.S. farm exports. It also expanded the number of U.S. companies subject to export controls and other restrictions by about two dozen.
Canadian Prime Minister Justin Trudeau said his country would slap tariffs on more than $100 billion of American goods over the course of 21 days. Mexico didn’t immediately detail any retaliatory measures.
The U.S. president’s moves raised fears of higher inflation and the prospect of a devastating trade war even as he promised the American public that taxes on imports are the easiest path to national prosperity. He has shown a willingness to buck the warnings of mainstream economists and put his own public approval on the line, believing that tariffs can fix what ails the country.
The Associated Press contributed to this report.
