Costco shoppers are in for some higher prices after the retailer announced that Donald Trump’s trade war with China will force prices to rise.
The warehouse retail store held an earnings call on Friday where CFO Richard Galanti told investors that the price on some items would be rising. As USA Today noted, Galanti said that the company was trying to take steps to insulate shoppers from the trade war, but that some rising prices would be inevitable.
Costco became the latest retailer to say that the trade war between China and the U.S. will likely lead to higher prices, but the warehouse giant says it is taking steps to withstand the battle.
Ultimately, it would be up to how Trump manages the relationship with China, Galanti hinted.
“We’re hopeful the ebbs and flows of the relations between our countries improves in that regard,” he said.
The increasing tariffs on China are expected to impact a range of items including smartphones and clothing, the USA Today report noted.
Donald Trump has long been critical of China’s economic practices, accusing the country of manipulating its currency during the 2016 presidential election and launching an investigation into trade policies after taking office in 2017, the BBC reported. His administration has imposed tariffs on billions of dollars worth of Chinese products, leading to retaliatory tariffs from China.
The two countries engaged in negotiations and even agreed to put a stop to new trade tariffs in December, but the talks deteriorated and the U.S. has more than doubled the tariffs on $200 billion worth of Chinese products, the BBC reported.
Reports have indicated that China is poised to inflict “real pain on the United States,” even at the expense of its own economy, in order to win the trade war. China’s Ministry of Commerce had recently called out the “wrong actions” by the United States and said that trade negotiations will not start again until the Trump administration reverses all of its new tariffs, NBC News reported.
“The message from China’s state media over the past week has been belligerent and uncompromising, with reminders for viewers of glorious moments when China and the Communist Party stood up to aggressors,” noted Mark Williams, chief Asia economist at Capital Economics. “It sounds like the leadership is preparing for a drawn-out fight.”
Costco is not alone in predicting some prices will rise as a result of the tariffs, with other retailers announcing that the trade war was having an effect on consumers.