A Costco executive warned consumers that potential price hikes in stores could be a result of President-elect Donald Trump’s proposed tariffs.
“When it rains, it rains on everybody,” Gary Millerchip, the chief financial officer of the big-box retailer told investors on an earnings call.
Costco is a popular membership warehouse club with more than 800 locations worldwide. Millerchip said that Trump’s plans to raise tariffs are far from certain.
“There’s a lot of uncertainty around the timing and scope of changes,” he said. “So, it makes it difficult for anyone to predict what the impact will be with confidence.”
More generally, Costco isn’t excited about the prospect of tariffs.
“Tariffs raise costs so that’s not something that we see as a positive in general,” he said.
Millerchip said the company has faced tariffs before and is ready to do so again.
“We believe that our merchants and buyers are equipped, as anybody is, to sort of work through and navigate and manage that situation,” he said. “We have a plan over time where we have done this in the past and typically, we’ll look where we can to pull forward inventory buying, which actually we’ve done already because of some of the less predictability around shipping and how much time product spends on the water and also because of the risk of strikes that we’ve seen in the past as well.”
He said Costco will look to diminish price increases.
“We’ll, of course, try and work with our vendors to make sure we’re looking for ways where we can to mitigate the cost,” he said.
On the campaign trail, Trump talked frequently about tariffs and proposed an across-the-board 10% to 20% tariff on imports with higher duties (up to 60%) on goods from China.
After winning the election, Trump vowed to hit America’s top trading partners – Mexico and Canada – with 25% tariffs on imported goods and singled out China for an additional 10% tariff. Trump said he plans put the tariffs in place on his first day in office and keep them in place until problems at the northern and southern border are fixed and China addresses its role supplying the precursor chemicals needed to make fentanyl, a powerful opioid blamed for more than 75% of U.S. overdose deaths.
None of the countries were thrilled about the proposal, but Trump’s talk has gotten attention in recent weeks.
Canadian Prime Minister Justin Trudeau on Tuesday announced that Canada would look to spend an additional $913.05 million on border security efforts at its border with the U.S. over the next few years.
