Some retailers are using President-elect Donald Trump’s proposed tariffs to urge consumers to shop now, suggesting if the import duties go into effect next year, a range of goods could cost Americans a lot more money.
It’s yet another sales tactic some companies are implementing, in addition to the traditional Black Friday discounts, to get consumers to spend as much as possible ahead of the holidays.
On Monday, Trump pledged to add a 25% tariff on all products from Mexico and Canada, along with a 10% levy on Chinese goods, in an effort to crack down on illegal immigration and illicit drugs flowing into the U.S. The proposed taxes are in addition to earlier campaign promises to impose a baseline 10% tariff on all U.S. imports and a 60% tariff on goods shipped from China, once he takes office.
While prices on variety of goods, ranging from shoes to vacuum cleaners, could indeed rise if Trump moves forward with his tariff proposals, some retail experts say that retailers may be seeking to tap into people’s universal fear of missing out on a limited-time offer or experience. But the tactic could also rub some shoppers the wrong way, experts caution.
“It’s a double-edged sword. I think it it might get people interested in buying things, but it could also split consumers if they think everyone’s going to bring their prices up,” said Neil Saunders, managing director and retail analyst at GlobalData. “The other problem is it’s slightly political as well, so some retailers would want to steer clear of it.”
While Trump has said he plans to move forward with tariffs, some economists have pointed out that the next administration may simply use the duties as a bargaining chip, which could enable the White House to strike new trade deals, for instance. Even though the tariffs are far from certain, a number of companies have explicitly said the levies floated by Trump would inevitably force them to raise prices for consumers.
“Lock in our current prices”
For example, filtered shower head maker Jolie recently said it would have pass along some of the anticipated costs from the tariffs to consumers. In a recent email to customers, the company said that tariffs on goods made outside of the U.S. would “mean we would need to raise our prices.”
“If you’re considering buying a Jolie, now is a great time to lock in our current prices,” the company added. Currently, a shower head with a filter subscription costs $148. The company announced a “potential” new price of $178.
Consumer electronics retailer Best Buy CEO Corie Barry similarly said on its latest earnings call that the goods it sells could become more expensive under Trump’s proposed tariffs.
Any added costs on U.S. imports from the three counties “will be shared by our customers,” Barry told investors on Nov. 26, noting that “there’s very little in [the] consumer electronics space that is not imported.”
“Pre-tariff” sales
And on Facebook, a Dallas, Texas-based furniture store called Finally Home Furnishings, announced a “pre-tariff sale” that runs until January, earlier this month.
“Get a deal while you still can,” the retailer said.
Finally Home Furnishings did not immediately respond to CBS MoneyWatch’s request for comment, or indicate how much it expects it may need to hike prices if new tariffs go into effect.
Etsy seller Buzzy Park, who sells handmade bamboo picture frames, also advertised a “pre-tariff ” sale on his entire inventory, starting this month and lasting until any new tariffs go into effect. “Hurry and get them at their current prices,” Park wrote in a social media post.
While prices on variety of goods, ranging from shoes to vacuum cleaners, could indeed rise, some marketing and retail experts say that even sellers who don’t expect to face added costs could be using potential tariffs as an excuse to charge customers more.
“If consumers panic about things getting more expensive, they are playing right into the hands of companies around the country to use it as an excuse to raise prices, even when it’s not necessary,” said Scott Lincicome, a trade expert at the Cato Institute, a public policy research group. “
He added, It’s a pretty handy excuse when you are in a constant battle with consumers on price.”
Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting.
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