Costco warns ‘prices will go up’ due to new tariffs

Retail giant Costco says it will likely have to raise prices due to the ongoing trade war between the U.S. and China. 

USA Today reports that Costco’s chief financial officer, Richard Galanti, said during an earnings call with investors that the company is hoping it does not need to raise prices, but is preparing to do so after new tariffs were announced this month between the two nations.

{mosads}“At the end of the day, prices will go up on things,’’ Galanti said. “We’re hopeful the ebbs and flows of the relations between our countries improves in that regard.’’

He added that the company has been seeking ways to reduce costs and prevent price hikes.

“We’ve gone to every supplier to see what we can do to reduce costs,’’ Galanti said. “In some cases, we’ve reduced order commitments. … And we’ve taken advantage of lower pricing on certain U.S. items that have been impacted the other way.”

According to USA Today, Costco has started seeing the effect of tariffs on goods including furniture, bikes and luggage.

The warning comes after President Trump announced earlier this month that tariffs on $200 billion of goods from China will rise to from 10 percent to 25 percent. He also warned of tariffs on an additional $325 billion of Chinese goods “shortly.” 

“For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods,” Trump wrote in his announcement on Twitter. “These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday.” 

The new tariffs have drawn backlash from farmers, who have been financially burdened by the tariffs and received financial aid from the Trump administration. 

Walmart also recently warned it may have to raise prices due to the tariffs.