Retailers have a new factor to manage in their tariff plans: Getting called out by President Donald Trump.
Companies are likely rethinking how to address any of their own tariff-related price hikes after the White House called out Amazon, four retail experts told Business Insider, making a complicated business environment even trickier to navigate.
After Punchbowl News reported that Amazon planned to publicize how much tariffs were contributing to price hikes on its website, press secretary Karoline Leavitt called the proposal a “hostile and political act” during a press conference. Amazon denied the report. A spokesperson told Business Insider that only its low-cost Amazon Haul store considered listing import charges on some products and never approved the plan, but the situation could have a chilling effect nonetheless, experts told BI.
“The sharp reaction to Amazon sends a warning signal to other companies that the administration is going to lash out at any firm that explicitly highlights the negative impacts of its tariff policy,” GlobalData retail analyst Neil Saunders wrote in an email to BI.
“Any retailer who was even considering implementing something along the lines of what it was reported Amazon was planning has likely immediately stopped all work and any further discussions to that end,” wrote Chris Walton, Omni Talk Retailer’s cofounder, in an email to BI. He thinks retailers will let the price “speak for itself” rather than draw any attention to tariffs.
“There is really no workaround that I can think of that wouldn’t catch the potential ire of DC given what we saw yesterday,” Walton wrote.
Some retailers, including Target and Walmart, have already said they will need to raise prices because of tariffs, and one of Trump’s former advisors predicted that consumers could see the hikes by the end of May. Trump has paused plans for additional tariffs on many countries for now, but has raised the levies on China, a huge exporter of consumer goods to the US.
When asked for comment, a representative for the White House directed BI to Leavitt’s statements during her press conference.
Companies communicate with consumers about how prices are calculated all the time, Rob Lalka, a professor at Tulane’s Freeman School of Business, said. Think, he said, about stores noting a state sales tax on a receipt.
“That’s always a way of redirecting public backlash against higher prices away from the company itself and toward policy or a policymaker,” Lalka said.
And consumers generally appreciate the transparency, according to Jason Miller, a professor of supply-chain management at Michigan State University.
“We could know from some well-established theories about the fairness of raising prices that it’s much easier to say, ‘Hey, I’m having to charge you more because my costs went up and here’s the exact amount my costs went up,'” Miller told BI. “People are much more accepting of that, because they view it as legitimate.”
With Trump’s Amazon rebuke, retailers are more hamstrung in how they can address rising costs. Saunders wrote that retailers might become “more sensitive” about any messaging around price hikes. Nearly every retailer will be affected given the global nature of our supply chains, but Saunders thinks the apparel and electronic sectors will likely face particularly tough questions.
As much as the Trump administration steers retailers away from highlighting tariffs — Saunders said it’s “sensitive to the growing backlash” and working to “manage the narrative” — consumers might get there on their own.
“Consumers are smart, and if they see prices go up at their favorite retailers, they will put two and two together and know that it is likely because of tariffs,” Walton wrote. Saunders also wrote that the messaging might not matter much if prices rise sharply, since Americans are “very aware” of the impact tariffs might have.
The potentially bigger consideration for retailers, Walton told BI, is how to set their future prices to remain competitive. Like many other questions plaguing businesses, that answer remains uncertain.
“How that plays out is still anyone’s guess,” Walton said.
Dominick Reuter contributed to reporting.
