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TJX CEO: New China tariffs could 'attract new customers' to chain

U.S. tariffs on Chinese-made goods could be a boon for The TJX Companies Inc., the company's executives said May 21.

Major U.S. retailers, including Walmart Inc. and Macy's Inc., have said this earnings season that new tariffs enacted and proposed by the Trump administration earlier in May could force them to raise on-shelf prices. Tariffs on $200 billion worth of Chinese imports rose to 25% from 10% on May 10, and the administration has threatened to apply the 25% rate to about $300 billion worth of additional imports, including footwear and apparel.

Speaking on a first-quarter earnings call to analysts, TJX CEO Ernie Herrman declined to provide a forecast of additional costs that the off-price retailer could face as a result of the most recently discussed tariffs.

But the executive did say that TJX stands to benefit from the duties. On one front, the tariffs could present the retail chain with opportunities to buy merchandise as the taxes interfere with supply chains to the U.S. from China. TJX, along with other off-price retailers, keep prices low by purchasing significantly discounted goods that brands cannot sell elsewhere.

"Historically, disruptions in the marketplace have created off-price buying opportunities for us," Herrman said.

On another front, the tariffs could be an opportunity to attract more value-conscious customers as prices rise at mainstream retailers. Customers will be "looking for better value on those categories that are affected," Herrman said, describing the shift as "a silver lining."

Existing tariffs on Chinese goods, which have been in place since 2018, have caused "little snippets of disruption" that have amounted to "nothing meaningful," Herrman said.

Herrman joined a chorus of retail executives who said during earnings calls on May 21 that their businesses could be altered by fresh tariffs on Chinese imports. J. C. Penney Co. Inc. said it is trying to diversify its supply chain to offset the impact of tariffs. Home Depot Inc. warned that tariffs will cost the company about $1 billion.