Home Depot: Why the U.S. Import Taxes Aren’t Under Trump’s Elusive Cursive Tailoring
“We don’t see broad-based price increases for our customers at all going forward,” said Billy Bastek, Home Depot’s merchandising chief, speaking on Tuesday’s call.
The country’s largest home improvement chain weighed in during a call with investors about its earnings report, just days after Walmart drew President Trump’s ire with a warning that his sweeping import taxes are pushing the world’s largest retailer to increase its typically low prices.
Home Depot has tremendous power in the market, and the chain is massive. It already sources more than half of its items from the U.S. Unlike Walmart, it doesn’t sell food and has a higher average receipt.
Although Trump says foreign countries should pay for his tariffs, it’s U.S. businesses that get the tariff bill when they claim their imported goods at the border. The U.S. imposes 30% on Chinese imports compared to the previous 145%. The new 10% tariffs for all global imports.
Walmart CEO Doug McMillon had told investors on Thursday that the company was already eating some of the tariff costs, as were its suppliers. It was changing costs so that it would not raise prices on food.
“We aren’t able to absorb all the pressure given the reality of narrow retail margins in retail,” said McMillon.
The Trump Administration also accused Amazon of hostile and political moves, after news reports suggested the retailer might display new tariffs on its low-cost marketplace called Amazon Haul. Following a phone call between Trump and founder Jeff Bezos, Amazon said it never had such a plan at all.
Shortly after that, Trump threatened to put a 100% tariff on Barbie-maker Mattel after the company said it would raise prices on some toys due to tariffs. “He won’t sell a single toy in the US,” Trump said.
Target and Lowe’s: Dealing With Wall Street Taxes and Wall-Centric Regulation in the U.S. Retail Market
“We’ve got a different type of customer and use case for home improvement,” CEO Ted Decker told investors. “Our customer is doing well right now.”
The home improvement chain reported U.S. sales rising 0.2% and shopping transactions up 2.1% in the latest quarter, as people undertook more smaller-scale projects. Many people are postponing major renovations due to the slump in the U.S. housing market.
The U.S. economy was “past the worst forecasts”, thanks to strong employment levels and lower gas prices, according to Decker.
On Wednesday, rival Lowe’s is expected to address tariffs when it reports earnings. Target has a report that depends on more people buying clothes, cosmetics, and other non-necessities that are often skipped when shoppers tighten their budgets.
Major American retailers are fighting two battles at once: as they grapple with the costly price impact from President Trump’s sweeping tariffs, they are struggling to talk about it publicly without enraging the White House or alienating their customers.
“We have many levers to use in mitigating the impact of tariffs, and price is the very last resort,” Target CEO Brian Cornell told investors on an earnings call on Wednesday. The other levers include negotiating with suppliers, changing up product selection, shifting where items come from and reshuffling the timing of orders.
