TJ Maxx CEO says company could benefit from Trump’s proposed tariffs
Retailers and industry trade groups are sounding the alarm about how President-elect Trump’s proposed tariffs could lead to higher prices. However, officials from TJ Maxx’s parent company have a different take, saying the discount retailer may actually benefit.
TJX Companies Inc. CEO Ernie Herrman said on an earnings call with analysts on Wednesday that when there is “chaos” in the market, it usually presents an “opportunity for us.”
His comment was in reference to a question about whether tariffs could provide any benefit to the off-price department store’s business model.
TJX Companies, Inc. also owns Marshalls, HomeGoods, HomeSense and Sierra.
Under the proposals, a universal 10%-20% tariff could be imposed on imports from all foreign countries and an additional 60%-100% tariff could be imposed on imports specifically from China.
“Manufacturers could bring in goods early,” Herrman said. “That could create actually even additional availability of goods at advantageous prices for us because we can take advantage of that opportunistically.”
Herrman declined to speculate on what will happen but said that if tariffs are implemented, the company is “set up to ensure that we maintain our value gap” between its competitors. No matter what happens with tariffs, the company will ensure its “values are proportionately below them as they always have been.” Herrman said.
If a brand faces tariffs on a certain category, forcing them to raise prices, and those higher prices are passed on to other retailers, the price of that specific item could increase slightly, according to Herrman. However, he said, “it will never be at any issue with the value gap that we have relative to the competition.”
The comments come on the heels of Walmart CFO John David Rainey’s remarks that the proposed tariffs could lead to higher prices for its shoppers.
“Tariffs are going to be inflationary. There’s no disputing that,” Rainey said during an interview with Liz Claman on “The Claman Countdown” on Thursday. “Likely consumers are going to pay more for the items that they pay and that these tariffs are applied to.”
In a statement to FOX Business, a Walmart spokesperson said the company remains “concerned that significantly increased tariffs could lead to increased costs for our customers at a time when they are still feeling the remnants of inflation.”
Executives are not speculating about how much prices will rise or what products will be impacted if this proposal were to come to fruition.
However, the National Retail Federation (NRF), the largest U.S. retail trade group, estimated in a recent study that Trump’s proposed new tariffs could cost American consumers between $46 billion and $78 billion in spending power annually.
The NRF also said six categories of goods would be impacted, including apparel, toys, furniture, household appliances, footwear and travel goods.
Some U.S. manufacturers may benefit from the tariffs, but the gains for U.S. producers and the Treasury would not outweigh the overall losses to consumers, according to the trade group.
