Best Buy CEO says higher costs from tariffs would mean higher prices for shoppers
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- Best Buy is bracing for Trump's proposed tariffs on imports from China and Mexico.
- "There's very little in the consumer electronics space that is not imported," CEO Corie Barry said.
- Barry said consumers typically bear some of any added costs in the form of higher prices.
Best Buy is bracing for the impact of Donald Trump's proposed tariffs on imports from China and Mexico — especially as the vast majority of items it sells come from the two countries.
CEO Corie Barry said Tuesday during the retailer's third-quarter earnings call that despite recent efforts to diversify away from China, the country remains the company's largest source of merchandise with about 60% of cost of goods sold.
Mexico is second on Best Buy's list, which, along with Canada, could see tariffs of 25% when President-elect Trump takes office in January. Goods from China would see an additional 10% charge if Trump follows through on his promise.
"There's very little in the consumer electronics space that is not imported," Barry said. "Almost everything is imported in C. E."
She also said the COVID-19 pandemic and related supply chain disruption interfered with the movement away from dependence on China.
If Trump imposes his earlier tariff proposal of 60% on goods from China, this new additional 10% tariff would increase that percentage up to 70%.
Although most of Best Buy's products come from overseas, Barry said the company is only the importer of record for about 2% to 3% of its total volume.
US importers of record are responsible for paying any fees on shipments arriving from countries targeted by tariffs, and companies may choose to pass those costs along to retailers, who may then raise prices for customers.
"We see that the customer ends up bearing some of the cost of the tariffs," Barry said. "For us, that's the hardest part. These are goods that people need and higher prices are not helpful."
As the final rules and exemptions are worked out, Barry said Best Buy is reviewing a range of options to soften the impact of new fees , including moving shipments earlier, shifting the product assortment, and negotiating with vendors.
"It's obviously an evolving issue," she said.
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