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Target to pass costs of tariffs to suppliers instead of customers

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Target to pass costs of tariffs to suppliers instead of customers

Target Corp. has asked its suppliers to bear the costs of the Trump administration's latest tariffs on China-made consumer goods, instead of passing price increases to customers, The Wall Street Journal reported Sept. 4, citing a memo sent by Target to its suppliers.

The letter, which was signed by Target's Chief Merchandising Officer Mark Tritton, was sent Aug. 27, days before U.S. President Donald Trump imposed new tariffs on Chinese imports on Sept. 1, the report said.

Target told suppliers that it expects them to develop "appropriate contingency plans" so that the company could avoid passing the effect of price increases to its customers.

A Target spokeswoman told the Journal that the memo is part of the U.S. retailer's ongoing communication with its suppliers about the impact of tariffs.

"Given the scope of our business and breadth of our assortment, including owned and national brands, we've needed to take a number of steps to manage our business accordingly and keep prices low for guests," the spokeswoman reportedly said.

Meanwhile, Target rival Walmart Inc. told a conference Sept. 4 that raising prices will be the company's "last resort" to offset the impact of the latest round of tariffs on China.

"At the last resort, if we have to raise prices we'll do that to manage our margin to where we need it to be. ... Our goal is to offset as much as we possibly can, either through negotiation or managing [merchandise] mix," Walmart Chief Merchandising Officer and Executive Vice President Steve Bratspies had said.

In June, Target, along with other retail chains, warned the U.S. government that consumers would suffer the most when the White House proceeds with the additional levy, according to the Journal.

"Simply put, additional tariffs on these products will require new families to spend more or make trade-offs about which products they're able to purchase for their families," Tritton reportedly said in a letter to U.S. Trade Representative Robert Lighthizer at the time.