New York — American retailers are entering one of the most uncertain and turbulent economic periods in recent history, as newly imposed tariffs on goods from Mexico, Canada, and China threaten to send prices soaring. Among the hardest-hit companies is Target, whose CEO, Brian Cornell, has warned that consumers will begin to feel the effects of rising costs almost immediately. As the company navigates the pressures of escalating trade tensions, it is also facing backlash from consumers over its recent retreat from diversity, equity, and inclusion (DEI) policies. The convergence of these two crises has left Target in a precarious position, struggling to balance profitability, public perception, and consumer affordability.
The latest round of tariffs, introduced by the Trump administration, includes a sweeping 25% import tax on goods from Mexico and Canada, which officially took effect on Tuesday. Simultaneously, tariffs on Chinese imports have doubled from 10% to 20%, adding to the financial burden on American businesses that rely on overseas suppliers. These tariffs are layered on top of existing duties on hundreds of billions of dollars in Chinese goods, further complicating the trade relationship between the U.S. and its key economic partners. In response, both China and Canada swiftly announced retaliatory measures, implementing tariffs on American exports, while Mexico is expected to unveil its own countermeasures in the coming days.
The Trump administration has defended these aggressive trade policies, citing the need to curb the illegal importation of fentanyl into the United States. However, industry analysts warn that the broader economic consequences could be severe, as rising import costs are expected to filter down to everyday consumers. The increased cost of goods is likely to be passed along the supply chain, leading to price hikes on essential items ranging from groceries to electronics.
Target, which sources a significant portion of its inventory from Mexico and China, is among the retailers feeling the immediate strain. In an interview with CNBC, Cornell emphasized that grocery prices would be among the first to be affected, particularly fresh produce. During the winter months, Target relies heavily on fruits and vegetables imported from Mexico, making it difficult to absorb the sudden increase in costs. “We are working tirelessly to shield consumers from the impact, but in certain categories, such as fresh produce, price increases will be unavoidable,” Cornell admitted. “Shoppers should expect to see adjustments at checkout within the next few days.”
The uncertainty surrounding trade policy has also created challenges for Target’s financial planning. The company has cautioned that its profit outlook for the quarter may be impacted by the unpredictability of tariff-related expenses. While executives remain hopeful that the situation will stabilize, the volatile nature of the current economic landscape has made it increasingly difficult to forecast future performance with confidence.
Retail giant Best Buy is facing similar pressures, particularly in the consumer electronics sector, where China and Mexico serve as the primary sources of imported products. Best Buy CEO Corie Barry, speaking on a call with analysts, highlighted the unprecedented nature of the situation, stating that the breadth of tariffs now in place is unlike anything the retail industry has previously encountered. “We have never seen tariffs implemented at this scale, and this will undoubtedly affect the entire sector,” Barry said. “Our suppliers are already factoring in these additional costs, and it is highly likely that they will be passed on to retailers and, ultimately, to consumers.”
As Target grapples with these financial and operational challenges, it is simultaneously dealing with growing consumer discontent over its decision to roll back certain diversity initiatives. Last month, the company announced a shift in its DEI strategy, eliminating hiring targets for minority employees, dissolving an executive committee focused on racial justice, and scaling back various other inclusivity programs. While Target has maintained that it remains committed to fostering a diverse and inclusive workplace, the move has sparked outrage among progressive customers, particularly Black consumers.
The backlash has led to organized efforts to pressure the retailer, with Reverend Jamal Bryant of New Birth Missionary Baptist Church in Georgia spearheading a high-profile boycott campaign. Bryant has called on 100,000 individuals to abstain from shopping at Target for 40 days, aligning the protest with the religious observance of Lent. As part of the movement, consumers are encouraged to support Black-owned businesses instead.
Early data suggests that this backlash may already be taking a toll on Target’s foot traffic. According to retail analytics firm Placer.ai, which tracks store visits using mobile location data, Target has experienced a sharper decline in customer traffic compared to its competitors. While Walmart and Costco have also seen fluctuations in foot traffic, the decline at Target has been more pronounced.
For the week of February 17, the most recent period analyzed, foot traffic at Target stores fell by 7.9%, compared to a 5.2% decline at Walmart. In contrast, Costco, which has remained steadfast in its commitment to DEI policies, saw a 4.8% increase in store visits.
Joseph Feldman, an analyst at Telsey Advisory Group, has pointed to these numbers as evidence that Target’s policy shift may be alienating customers. “There is a clear drop in consumer engagement following Target’s decision to scale back its DEI commitments,” Feldman wrote in a research note. “While other factors such as weather and economic conditions may be at play, the data suggests that this policy change is having a measurable impact on foot traffic.”
With mounting financial pressures from tariffs and growing scrutiny over its corporate policies, Target finds itself at a crossroads. The company must now navigate a complex landscape where economic factors and consumer sentiment intersect, shaping the future of one of America’s most prominent retail brands.
