Insightful Word
  • Investing
  • Stock
  • Economy
  • Politics
  • Investing
  • Stock
  • Economy
  • Politics
No Result
View All Result
Insightful Word
No Result
View All Result
Home Stock

What do Trump 2.0 tariffs mean for US retailers?

admin by admin
December 7, 2024
in Stock
0
What do Trump 2.0 tariffs mean for US retailers?
0
SHARES
16
VIEWS
Share on FacebookShare on Twitter

Investing.com — Bernstein analysts on Tuesday highlighted potential tariff risks for major US retailers in light of President-elect Trump’s commitment to impose tariffs on imports from Canada, Mexico, and China.

Among the retailers, Dollar Tree (NASDAQ:DLTR) and Target (NYSE:TGT) were identified as particularly exposed due to their significant reliance on imported goods, which account for a substantial portion of their cost of goods sold (COGS).

The firm’s analysis indicated that consumer goods such as computers, cellphones, toys, games, electric apparatus, and apparel & textiles, primarily imported from China and Mexico, would be most affected by the proposed tariffs.

In addition, the report mentioned possible indirect impacts due to increased commodity prices, like oil & gas and aluminum, though these could be offset by a rise in domestic production.

According to Bernstein, Target and Dollar Tree have the highest exposure to imports, with estimates suggesting that imports represent 50% or more of their total exposure, direct and indirect.

“This is largely in line with the ranking of our coverage companies based on their number of shipping containers imported per $100M sales in FY23, with DLTR and TGT being the top importers,” analysts led by Zhihan Ma said.

Target has the highest proportion of COGS tied to imports, at approximately 50%, among mass and club retailers. Walmart (NYSE:WMT) follows, with around one-third of its COGS sourced from imports. Analysts note that categories like apparel, toys, and sporting goods, particularly imports from China, could face increased exposure to tariff risks.

In the home improvement sector, Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW) have a similar reliance on imports, with an estimated 40-50% of their COGS coming from international sources. Bernstein points out that Lowe’s heavier focus on appliances and electrical products may result in higher vulnerability to potential tariffs.

The report also reflected on the 2019 tariffs, during which Target and Dollar Tree experienced a gross margin headwind of approximately 30-40 basis points in affected quarters due to increased product costs. Lowe’s reported a similar impact of about 25-40 basis points.

The analysis cautioned that, depending on the specifics of any new tariffs, retailers with substantial Chinese import exposure could face similar margin pressures.

While tariffs on Canadian and Mexican imports are expected to have a lesser effect on the retailers covered, the electronics and appliances sectors could still be impacted due to significant imports of computers and electric apparatus from Mexico.

“Companies with meaningful exposure to the electronics and appliances categories could be impacted, although the precise impact and tariff level is unclear at this stage,” analysts wrote.

This post appeared first on investing.com

Previous Post

What is the AI opportunity for global telecom sector?

Next Post

Uber responds to Waymo, launches robotaxi rides in Abu Dhabi

admin

admin

Next Post
Uber responds to Waymo, launches robotaxi rides in Abu Dhabi

Uber responds to Waymo, launches robotaxi rides in Abu Dhabi

Trending News

Dogizen poised for gains, Bitcoin bull Paul Tudor Jones sees BTC upside

Dogizen poised for gains, Bitcoin bull Paul Tudor Jones sees BTC upside

October 27, 2024
CartelFi hits $1.5m in presale as memecoins move into DeFi

CartelFi hits $1.5m in presale as memecoins move into DeFi

May 4, 2025
Why Nvidia is facing scrutiny despite strong earnings as stock jumps 5%

Why Nvidia is facing scrutiny despite strong earnings as stock jumps 5%

May 29, 2025
Subscribe to Insightful Word


    Recent News

    The Labubu craze: identity, status, and a ₹1.2 crore toy

    The Labubu craze: identity, status, and a ₹1.2 crore toy

    August 6, 2025
    US stocks open in the green as earnings drive stock moves: Nasdaq up 0.3%

    US stocks open in the green as earnings drive stock moves: Nasdaq up 0.3%

    August 6, 2025
    Apple to invest $100B more in US manufacturing amid tariff threats

    Apple to invest $100B more in US manufacturing amid tariff threats

    August 6, 2025
    Is Archer Aviation a good eVTOL stock to buy today?

    Is Archer Aviation a good eVTOL stock to buy today?

    August 6, 2025

    Recent News

    The Labubu craze: identity, status, and a ₹1.2 crore toy

    The Labubu craze: identity, status, and a ₹1.2 crore toy

    August 6, 2025
    US stocks open in the green as earnings drive stock moves: Nasdaq up 0.3%

    US stocks open in the green as earnings drive stock moves: Nasdaq up 0.3%

    August 6, 2025

    Latest News

    • The Labubu craze: identity, status, and a ₹1.2 crore toy
    • US stocks open in the green as earnings drive stock moves: Nasdaq up 0.3%
    • Apple to invest $100B more in US manufacturing amid tariff threats

    About Insightful Word

    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools
    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools

    Copyright © 2025 Insightfulword.com. All Rights Reserved.

    No Result
    View All Result
    • Investing
    • Stock
    • Economy
    • Politics

    Copyright © 2025 Insightfulword.com. All Rights Reserved.