Companies Blame Donald Trump for Why They May Raise Prices
Several companies have issued warnings on how Donald Trump 's proposed tariffs could impact product prices now that he's headed back to the White House in January.
During his campaign, Trump made his tariff plans known, calling for a 10 percent to 20 percent tax on all imports and a potential 60 percent to 100 percent tax on all goods shipped from China.
The tariffs, which aim to support American business and reduce reliance on Chinese imports , could have one particularly negative side effect for consumers: higher prices.
AutoZone CEO Philip Daniele said customers will face significantly higher prices if Trump's tariffs do become a reality in 2025.
"If we get tariffs, we will pass those tariff costs back to the consumer," Daniele told Benzinga.
Even before the tariffs would likely take effect, AutoZone and other companies are looking to adjust prices to account for the higher tax they would face with imports.
"Several companies have already expressed their opposition to the proposed tariffs and for good reason," Alex Beene, financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
"Economic data on past tariffs have shown that the negative effects far outweigh the positive ones. The amount of revenue they bring in for the federal government is surprisingly low, the amount of jobs they create is usually minuscule, and ultimately the amount of tariffs is unfortunately reflected in the new sale price to consumers."
Steve Madden, a popular shoe brand, also plans to pass on the higher tariff costs to the consumer. The company, which sources 70 percent of its products from China, said it may be lowering Chinese production by half and starting to do more business with Vietnam, Cambodia and Mexico.
Despite these changes, Steve Madden said customers should expect higher prices as a result of Trump's possible tariffs.
Columbia, a sportswear brand, may also be raising prices due to the extra costs associated with the tariffs.
"Tariffs have already impacted businesses and grocery store pricing. People often overlook that current tariffs have kept prices higher than usual," Kevin Thompson, finance expert and founder/CEO of 9i Capital Group, told Newsweek.
"Back in 2018, farmers were so severely affected that many smaller farms nearly went out of business, only surviving due to government relief payments. Small businesses, like smaller farmers, are likely to bear the brunt of the damage. They could be forced out of business as larger players either absorb the cost to drive consolidation or simply outlast their smaller competitors."
A report from the National Retail Federation also sounded the alarm that American consumers should expect prices on everything from furniture to clothes and wine to increase significantly.
Shoes and coats that were once around $100 could now cost $20 more, the organization said. Over time, those price surges could make a significant dent in Americans' wallets, costing them thousands over the span of a few months.
Other companies voicing concerns include tool company Stanley Black.
"Obviously, coming out of the gate, there would be price increases associated with tariffs that we put into the market," CEO Donald Allan told Benzinga.
Even some of the most affordable stores around are likely to hike prices in response to the proposed tariffs.
Finance experts say Dollar Tree may need to change its $1.25 price per item since it relies on many Chinese imports, and other top budget retailers would also not be immune to the price surging.
"What the administration seems to overlook is that you can't simply restart or establish production overnight," Thompson said. "Building or restarting factories, retraining a significant portion of the workforce, and scaling operations takes years. Additionally, domestic talent is likely to demand higher wages, further driving up prices."
Beene said Trump's first presidency showed an openness to listening to business leaders, but it's unclear how these concerns will weigh on Trump's proposed tariffs.
"The possible good news is the first Trump presidency did show an openness to listening to businesses on their legislative concerns," Beene said. "If they can make their case to Trump in the coming months, it's likely some of these proposed tariffs won't come to pass."
Ben Aneff, owner of New York City-based Tribeca Wine Merchants, said tariffs could disproportionately impact small businesses like restaurants and retail stores, which would suffer from lower margins.
"Long-term you'd see restaurants and wine retailers suffer real damage," Aneff told Newsweek. "We would see many of our favorite restaurants close, and successful local restaurant groups would find it much harder to open new businesses ... [Tariffs] do more damage to small local businesses here at home than to their targets abroad, and they are not an effective remedy to unfair trade practices overseas."
Michael Ryan, finance expert and founder of michaelryanmoney.com, said despite the cost concerns, the tariff proposals' full implementation remains unclear.
"In my mind, the strategy may be more about negotiation leverage than absolute policy," Ryan told Newsweek.
"I find these tariffs fundamentally at odds with traditional free-market principles. They represent a protectionist approach that overlooks the intricate, interconnected nature of modern global supply chains."
