Prices for fruits and vegetables are likely to rise within a matter of days thanks to President Donald Trump’s sweeping tariffs on products from Mexico, Target’s CEO said Tuesday.
Speaking hours after a 25-percent duty on products from Mexico and Canada took effect, Brian Cornell told CNBC’s Squawk Box that during the winter months, the retail giant relies heavily on Mexico for fresh produce like strawberries, bananas and avocados.
“Those are categories where we’ll try to protect pricing, but the consumer will likely see price increases over the next couple of days,” he said.
“If there’s a 25 percent tariff, those prices will go up,” he added.
Trump has made tariffs a central part of his economic policy and said he plans to create an “External Revenue Service” to oversee the duties. The name reflects his oft-repeated and inaccurate claim that tariffs are paid by foreign countries.
In fact, they’re a tax paid by American companies, with the costs passed on to consumers.
And given the short supply chains for fresh produce, buyers will see those price increases almost immediately, Cornell said. A couple of months ago, only about 20 percent of America understood what a tariff was, but now it’s closer to 50 percent, he said.
“I think they understand what that means,” he said. “The fact that it could have an implication on them, the prices they pay.”
The conversation around tariffs has contributed to buyers becoming more cautious and consumer confidence falling in recent weeks, he said. Shoppers still celebrate key holidays, but they’re shopping on a budget, he added.
