Retail

Target Punts Tariff Costs To Suppliers To Minimize Consumer Impact

To minimize the impact of tariffs on consumer goods from China, Target is reportedly telling its suppliers to handle tariff costs. The retailer, along with other store chains, have warned the government in the past that shoppers would be on the hook through increased prices, The Wall Street Journal reported.

Before the new tariffs went into force at the beginning of September, Target reportedly sent suppliers a letter. A memo signed by Target Chief Merchandising Officer Mark Tritton said the retailer “will not accept any new cost increases related to tariffs on goods imported from China.”

The memo sent to national-brand vendors that are the importers of record on Chinese goods is said to be part of ongoing communication with suppliers over the tariffs’ impact. A Target spokesperson said, according to the paper, “Given the scope of our business and breadth of our assortment, including owned and national brands, we’ve needed to take a number of steps to manage our business accordingly and keep prices low for guests.”

The report noted that tariffs on some items like washing machines — hit by tariffs last year — caused higher prices for shoppers as households need such items. But it noted that industry officials say shoppers are reluctant to pay more for many products. And the largest retailers in the U.S. have more leverage than smaller operations in negotiating with importers as well as suppliers to minimize additional tariff costs.

In separate news, reports surfaced last month that Apple’s AirPods, Apple Watch and HomePod were not included in a temporary reprieve on tariffs by the Trump administration. Instead, those items were to get hit with a 10 percent tax on Sept. 1 per news in August.

One bright spot, however, was that major items like cell phones and laptops, including Apple’s MacBooks and iPhones, will not face tariffs until Dec. 15.

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PYMNTS STUDY: THE CROSS-BORDER MERCHANT FRICTION INDEX – JUNE 2020

The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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