Here’s why the CEOs of major retailers like Walmart, Gap and Target are sounding so calm about Trump’s tariff standoff

Phil Wahba

As President Donald Trump&#8217;s tariff policies strike fear in the hearts of business leaders across the U.S., a handful of major retail CEOs are sounding relatively calm about the whole ordeal.  <div class="paywall-selector"></div><div class="paywall">



Last month, Trump threatened to impose across-the-board levies on Mexico, Canada and China. Although those North American partners have received two reprieves, the on-again-off-again policymaking is <a href="https://www.nytimes.com/live/2025/03/10/us/president-trump-news">spooking the markets</a>, especially after the president <a href="https://www.nytimes.com/live/2025/03/09/us/trump-news-updates">refused to rule out</a> the possibility of those policies creating a recession later this year. 



Some business leaders have issued <a href="https://www.axios.com/2025/02/12/trump-auto-tariffs">dire warnings</a> about the new tariffs, with Ford CEO Jim Farley going as far as to say they will “blow a hole in the U.S. industry that we have never seen.” But several retail CEOs have been downright sanguine about the prospect of a trade war on recent earnings calls, citing their diversified supply chains, and previous experience weathering tariffs. 



&#8220;Tariffs are something we&#8217;ve managed for many years, and we&#8217;ll just continue to manage that,&#8221; said <a href="https://fortune.com/company/walmart/" target="_blank">Walmart</a> Inc CEO Doug McMillon last month. <a href="https://fortune.com/company/home-depot/" target="_blank">Home Depot</a> CEO Ted Decker echoed that sentiment, saying &#8220;we&#8217;ve been through that before, and I think we have the best team to manage through any tariff environment which would impact the industry broadly.” <a href="https://fortune.com/company/target/" target="_blank">Target</a> chief Brian Cornell was equally even keeled last week, telling investors that the company has “managed through tariffs in the past.”



Many retailers were forced to negotiate tariffs during Trump’s first term. And they have also spent the past decade diversifying their supply chains, and expanding the number of countries from which they buy their merchandise. That’s particularly true for clothing-focused retailers like Abercrombie &amp; Fitch and <a href="https://fortune.com/company/gap/" target="_blank">Gap</a>, both of whom touted diversified geographical sourcing on recent earnings calls. Apparel made in China represented 34% of clothing imported to the U.S. in 2017, according to<a href="https://www.bloomberg.com/news/newsletters/2023-10-31/supply-chain-latest-china-s-dominance-in-apparel-manufacturing"> a Bloomberg analysis</a>. By 2023, that number was down to 20%, as countries moved their production to places like Vietnam and Bangladesh.



But that’s not to say that all retail companies are feeling calm. <a href="https://fortune.com/company/best-buy/" target="_blank">Best Buy</a> CEO Corie Barry said that while the company only directly imports 2% or so of what it sells, the rest coming from electronics vendors, the tariffs could cause a ripple effect that would ultimately hit consumers. &#8220;We expect our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers highly likely,&#8221; Barry said.<a href="https://www.nbcnews.com/business/business-news/target-best-buy-warn-price-hikes-trumps-tariffs-rcna194591"> Best Buy estimates the tariffs could hit comparable sales</a> in 2025 to the tune of 1%.&nbsp;



Grocery executives at <a href="https://fortune.com/company/kroger/" target="_blank">Kroger</a> ] also expect fresh food like lettuce to get more expensive, along with other staples that U.S. companies import from warmer Mexican climates during the winter. That applies to the burgeoning grocery businesses of big box retailers like Walmart and Target as well. Cornell said that if tariffs go into effect, consumers would see price hikes on items like fresh fruit and vegetables &#8220;within days.&#8221;&nbsp;



No matter what happens with tariffs in the near future, Trump’s latest moves are prompting a number of U.S. companies to keep diversifying their overseas suppliers base. <a href="https://fortune.com/company/hasbro/" target="_blank">Hasbro</a> CEO Chris Cocks told Wall Street analysts that the company was &#8220;on a path to move from 50% of our U.S. toy and game volume originating from China to under 40% over the next two years.&#8221;



And despite the unruffled demeanor of America’s top retail CEOs, Wall Street&#8217;s selloff on Monday suggests that trade wars could sink the economy into a recession. The National Retail Federation has estimated American consumers&#8217;<a href="https://nrf.com/media-center/press-releases/trump-tariff-proposals-could-cost-americans-78-billion-annual-spending"> spending power could fall</a> by between $46 billion and $78 billion every year they are in place. And that does indeed have retail executives, even veterans of the tariff wars, watching closely. 



&#8220;What we don&#8217;t know is the potential consumer demand that&#8217;s across the board based on how tariffs ripple across the economy,&#8221; said Target finance chief Jim Lee.</div>

Top executives at Walmart, Target, and Gap have become less reliant on Chinese suppliers in recent years.

Why US retail CEOs sound calm amid Trump tariff threats

Did your workplace make our list of the World's Most Admired Companies?
<a href="https://fortune.com/ranking/worlds-most-admired-companies/?&itm_source=fortune&itm_medium=article_tout&itm_campaign=DecJanMag">Explore this year's list.</a>

P-Reported

View from the C-Suite

Leadership

Top CEOs said they've become less reliant on Chinese suppliers in recent years.

Why US retail CEOs sound calm amid Trump tariff threats | Fortune

Preston Fore

BlackRock CEO Larry Fink holds up two pinched fingers while speaking.

BlackRock CEO sounds the alarm to Trump on the scarcity of this skilled trade profession—but Gen Z may be able to save the day

/2025/03/11/skilled-trade-shortage-blackrock-ceo-larry-fink-gen-z-trump/

Sydney Lake

Jamie Dimon says business school grads taking a private equity job while already working at JPMorgan is ‘unethical’

/article/jamie-dimon-says-grads-taking-private-equity-job-jpmorgan-unethical/

Christiaan Hetzner

Tesla CEO Elon Musk (R) jumps on stage as he joins former US President and Republican presidential candidate Donald Trump during a campaign rally at site of his first assassination attempt in Butler.

Trump declares Tesla boycott ‘illegal’ and vows to buy a new car from Elon Musk in solidarity 

/2025/03/11/president-trump-elon-musk-tesla-boycott-illegal-evs/

Prarthana Prakash

Unilever’s new CEO wants to make the Dove soap maker popular with influencers as a ‘machine of content creation’

/europe/2025/03/11/unilever-ceo-fernando-fernandez-dove-soap-maker-popular-influencers-machine-of-content-creation/

Brit Morse

Meta reportedly keeps ‘do not hire’ lists but HR experts warn the practice can be risky 

/2025/03/11/meta-reportedly-keeps-do-not-hire-lists-but-hr-experts-warn-practice-can-be-risky/

Diane Brady

Prologis CEO on the chaos and opportunity of tariffs: ‘I don’t like to make our money that way’

/2025/03/11/prologis-ceo-on-the-chaos-and-opportunity-of-tariffs-i-dont-like-to-make-our-money-that-way/

Ani Freedman

This gastroenterologist says probiotics are 'a waste of money.' Here’s what you should be doing instead

https://fortune.com/well/article/probiotics-bloating-gut-health-fiber-diet/?itm_source=parsely-api

Sasha Rogelberg

Fired NIH workers fear bleak job prospects in the private sector because their research is too specific to be retrofitted: 'No VC is going to fund that'

https://fortune.com/2025/03/11/fired-nih-workers-bleak-jobs-private-sector/?itm_source=parsely-api

https://fortune.com/2025/03/10/trump-tariffs-retail-ceos-react-soun-calm-walmart-gap-target-home-depot/?itm_source=parsely-api

Josh Hoffman

Kevin Katari

The California crisis in homeowners insurance has only one real solution

https://fortune.com/2025/03/10/california-homeowners-insurance-crisis/?itm_source=parsely-api

Nicholas Gordon

Tesla loses $127 billion in one-day market bloodbath as China car group questions Musk’s pursuit of ‘personal glory’

https://fortune.com/asia/2025/03/11/tesla-shares-drop-china-byd-ev/?itm_source=parsely-api

Amanda Gerut

Larry Ellison’s Oracle just reported $130 billion in future contracts—which doesn’t include even a single transaction from Stargate

https://fortune.com/2025/03/11/larry-ellison-oracle-stock-future-revenue-stargate-ai-nvidia/?itm_source=parsely-api