As the living standard rises, more and more consumers will suffer under the pressure of price hikes at several stores. Many of America’s top retailers like Walmart, Target, and Costco are increasing their prices on certain products, due to the pressure of the tariffs implemented by President Donald Trump. This is a big blow for many loyal consumers since these are the retailers many of them purchase their daily essentials, mainly because these chains offer affordable prices.
Reasons for the price hikes
As read in various articles and newspapers, consumers know about the tariff increases implemented by President Trump. Many other big organisations will suffer severely from the consequences of these high tariffs will affect their business operations. To ensure that organisations remain effective and profitable, various steps had to be taken and implemented to prevent businesses from failing.
Therefore, one of the measures to ensure these retail warehouse remain operative, was to make that big decision to increase the prices of certain products. It is expected that the United States will implement 25% on tariff for products being important from countries like Canada and Mexico.
The taxes being paid for products made in China will be 20% – but as stated by Quarts the countries where these products are not necessarily responsible to pay for the tariffs of these products. Instead, the business importing the products should take that responsibility. However, many businesses find it difficult to pay that high amount set out for tariffs and therefore, the United States consumer will be burdened with price hikes.
Products expected to be more expensive
Due to the high tariffs, several products are expected to increase, and these are some of the fan favourites and daily essentials. It is for this reason that consumers need to be more thorough when it comes to the product they view as an essential product. If consumers cannot afford to purchase their usual essentials, they will have to make alternative arrangements like buying another product or just try going without it.
Some of the products that will be affected by the price hikes in the retailers include items like:
- Toys,
- Electronics – this includes appliances like mobile phones, laptops and televisions,
- Clothing and footwear will be affected due to the production in China, and
- Various imported foods also fall under this list,
- Cars,
- Medicines,
- Semiconductors and
- Lumber imported
Products imported from Mexico also experience the price hikes at retailers like Target. These are products like:
- Avocados,
- Strawberries,
- Bananas,
- Tomatoes,
- Raspberries,
- Blackberries and
- Peppers.
Impact of high tariffs on retailers
As mentioned previously, many businesses and retailers are heavily pressured with these high tariffs and price hikes. Walmart, one of the world’s largest retailers, indicated that the company has certain strategies in place to address these measures. The CEO of the retailer alluded to the fact that the retailer has always find ways to manage the tariffs changes and will continue to do so.
Additionally, other big retailers like Target and Amazon also expressed their concerns for these drastic changes. The companies expected the major impact the high tariffs have on their supply chain. As a result of this, the price hikes will reduce the profit margins. This eventually force retailers to search for alternative suppliers and they are basically pressed to renegotiate with their manufacturers.
How to lighten the high tariffs burden?
There are various measures that businesses can implement to go about addressing this situation. Some of it includes the following:
- Searching for suppliers with lower costs.
- Companies can start to explore local production as an alternative. This will reduce the dependence businesses have on imports
- Market diversification is another measure that can be looked at. Mainly to balance the impact the high tariffs have on certain regions.