As President Donald Trump’s expanded tariffs on Chinese and global imports take effect, the nation’s biggest retailers are caught in a high-stakes dilemma. Should they pass these costs on to shoppers, or absorb the tariffs and protect their customers? The answer depends on the store, their supply chains, their business strategy, and the kind of pressure they’re willing to tolerate – from customers, suppliers, and the White House.
So far, companies like Home Depot are pledging to hold prices steady, while others such as Walmart and Mattel are planning increases. Target, Lowe’s, and Amazon have taken more cautious positions, signaling they will do what they can to avoid raising prices, but leaving the door open.
Here is a breakdown of how each major retailer is responding, what they’re saying publicly, and how the White House is reacting.
Home Depot: Keeping Prices Steady, For Now
Home Depot has emerged as one of the few large retailers openly saying they will not raise prices in response to new tariffs. In a May 20 earnings call, CEO Ted Decker told analysts that the company was in a strong position, citing resilient consumer spending and a diverse supply chain.
“I think from the micro point of view, the worst concerns have passed,” Decker said. He also noted that employment and inflation trends had improved in May, giving consumers more confidence.
Chief Financial Officer Richard McPhail said during a CNBC interview that Home Depot intends “to generally maintain our current pricing levels across our portfolio.” He credited the company’s scale and close vendor partnerships. McPhail explained that the majority of Home Depot’s products come from the United States, reducing their exposure to import tariffs.
Decker added that more than 50 percent of their purchases are U.S.-sourced and that the company has pushed its suppliers to reduce dependence on any single foreign country. “During that period, the vast majority of our supplier partners developed diversified sourcing strategies across several countries, including the United States,” he said. He noted that no one country outside the U.S. would account for more than 10 percent of Home Depot’s purchases in the next year.
Though some products may become temporarily unavailable or require substitution, Home Depot remains confident. “We remain bullish on the fundamentals of home improvement and are confident we are best positioned to win,” Decker said.
Walmart: Raising Prices, Facing Pressure
Walmart has taken a different route. Despite exceeding expectations in its first-quarter earnings, the company announced that it would raise prices due to the new tariffs. CEO Doug McMillon was clear during the May 15 earnings call.
“We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” McMillon said.
Walmart CFO John David Rainey added that customers will likely see some price increases starting in late May or early June, especially in general merchandise categories. Groceries, he said, would be less affected, as the company plans to absorb more of the costs in that area.
President Trump took aim at Walmart’s decision, posting online that, “Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!”
McMillon responded by reaffirming Walmart’s commitment to affordability but stood by the decision. “In retail, managing inventory is always important,” he said. “But even with sufficient inventories and stronger profit margins in advertising and e-commerce, some cost increases are too large to absorb entirely.”
Target: Downplaying Tariff Impact, Not Ruling Out Hikes
On May 21, Target lowered its annual sales forecast, citing weaker consumer confidence and reduced discretionary spending, both tied in part to Trump’s trade policies. However, when asked directly about raising prices due to tariffs, Target executives avoided a clear answer.
“We have many levers to use in mitigating the impact of tariffs, and price is the very last resort,” CEO Brian Cornell said on a call with investors. Those levers include negotiating with suppliers, changing the mix of products, adjusting the timing of shipments, and switching sourcing countries.
Target is trying to maintain a delicate balance: stay competitive on price while managing rising costs. So far, the company has not faced the public criticism directed at Walmart, perhaps because it has not yet announced specific price increases.
Lowe’s: Focused on Price Competition
Lowe’s, Home Depot’s main competitor, has also chosen not to announce broad price hikes. CEO Marvin Ellison said the company would focus on minimizing the impact of tariffs on shoppers.
“We have tools that will allow us to manage this — and manage this in a way that we’re going to minimize any impacts to our customers,” Ellison said during a May 21 earnings call. “In this environment, we’re going to be as keenly focused on competing on price as we are every single day.”
Still, Lowe’s will have to navigate cost pressures from vendors, some of whom are already raising their own prices. Stanley Black & Decker, for example, has raised prices and expects to raise them again later this year.
Best Buy: Higher Prices Likely
Even before the latest tariffs were imposed, Best Buy CEO Corie Barry warned that higher prices were probably coming. In a March 4 earnings call, Barry said, “While Best Buy only directly imports 2% to 3% of our overall assortment, we expect our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers highly likely.”
Although Best Buy’s next earnings call is not until May 29, their early messaging suggests they see price hikes as inevitable, even if indirectly passed down through suppliers.
Mattel: Toys Will Cost More
Toymaker Mattel made headlines when it confirmed that tariffs were pushing the company to raise prices in the U.S. In a May 5 earnings report, the company said it was operating in a “volatile” environment and could no longer absorb the rising costs tied to trade policies.
Chief Financial Officer Anthony DiSilvestro noted that while Mattel operates globally, roughly half of its business is in the United States. That makes U.S. tariffs especially painful. The company plans to raise prices on many of its iconic toys, including Barbie, Hot Wheels, and American Girl dolls.
President Trump threatened retaliation, stating, “He [Mattel CEO] won’t sell one toy in the United States,” after the price hike announcement.
Amazon: Quiet Strategy, but Some Prices Are Rising
Amazon has been more reserved in its messaging. CEO Andy Jassy said that the variety of third-party sellers on Amazon’s platform makes the impact of tariffs harder to predict. “Some merchants aren’t going to pass all or any of those tariffs on to customers,” he said in a May 1 earnings call.
Still, many third-party sellers have already increased prices or limited their stock due to tariff-related uncertainty. When news broke that Amazon might list tariff-related charges on its “Amazon Haul” site, the White House slammed the move. Amazon quickly denied that such a feature was ever approved.
Amazon spokeswoman Rachael Lighty said, “This was never approved and is not going to happen.”
The Bigger Picture: What’s Driving These Decisions
Retailers are not just reacting to tariffs—they are also responding to consumer confidence, inflation, labor market trends, and political risk. Trump’s recent tariff hikes include a 30 percent levy on Chinese imports and a new 10 percent tariff on goods from other countries. Although the Chinese tariff rate is down from a previously proposed 145 percent, it still represents a major cost shift for companies heavily reliant on overseas sourcing.
While Trump argues that foreign nations should pay for the tariffs, the reality is that U.S. businesses pay the duties when goods enter the country. Those costs either come out of company profits or get passed on to consumers.
Retailers with diverse supply chains and higher-margin operations have more flexibility to hold prices. Others, like Walmart and Mattel, say they have no choice but to raise them. Meanwhile, companies like Target and Lowe’s are walking a tightrope, trying to avoid raising prices while quietly adjusting their operations behind the scenes.
Retailers are Divided
As the tariff debate continues, big box retailers are revealing just how varied their strategies are. Home Depot and Lowe’s are betting on their U.S.-based supply chains and supplier relationships to hold prices steady. Walmart and Mattel are preparing for higher prices, citing financial realities. Target and Amazon are hedging their positions, trying to absorb costs selectively while avoiding political blowback.
For now, shoppers can expect a mixed experience—some prices rising, some holding firm, and some products possibly disappearing altogether. The full impact of the tariffs may not be felt until summer, but one thing is already clear: the economic and political pressure on America’s biggest stores is only going to grow.