Can Target Really Hold the Line on Tariffs?
Target (NYSE: TGT) is taking a hard line against tariffs, telling its suppliers of Chinese goods the retailer will not accept the higher costs and they will have to absorb all of the impact.
With some $112 billion worth of goods getting whacked by an increase in the tariff rate to 15%, Target let it be known that it was protecting its customers from bearing the brunt of the escalating trade war. CMO Mark Tritton wrote in a note to vendors, "Target will not accept any new cost increases related to tariffs on goods imported from China. Our expectation is that you will develop the appropriate contingency plans so that we don't have to pass price increases along to our guests."
While media reports seemingly supported the retailer's position, it's reasonable to ask how successful Target will actually be. China is the largest source of imported goods for the company, which means the retailer may be using it more as a negotiating tactic rather than a real cudgel it can wield in the trade war.
Source Fool.com
