Macy’s CEO Jeff Gennette said the Trump administration’s decision Monday to impose a fresh round of tariffs on Chinese goods “has not gone the way we hoped it would.”
The department store chain has been working with suppliers in Asia to prepare for potentially higher tariffs in the administration’s escalating global trade war, he told CNBC’s Courtney Reagan at the Code Commerce conference in New York Monday evening.
President Donald Trump announced plans to impose 10 percent tariffs on $200 billion worth of Chinese imports starting Monday, saying the country’s trade practices pose a “grave threat” to the long-term health of the U.S. economy. Those duties will rise to 25 percent Jan. 1.
“With the recent announcement even today, we do expect that there will be more tariffs,” Gennette. “It’s going to start to affect a department store retailer more significantly because of the apparel pieces that are going to be part of it.”
The National Retail Federation said the tariffs will increase the costs of consumer goods and could slow down a rebound in the retail sector so far this year. Macy’s just announced plans to hire more than 80,000 holiday workers to keep up with consumer demand this season, and its shares are up by more than 40 percent so far this year.
“Every time this trade war escalates, the risk to U.S. consumers grows,” NRF CEO Matt Shay said in a statement. “With these latest tariffs, many hardworking Americans will soon wonder why their shopping bills are higher and their budgets feel stretched. … We cannot afford further escalation, especially with the holiday shopping season right around the corner.”
The NRF has banded with more than 80 other trade groups across a wide swath of American industries to oppose the tariffs with a new coalition called Americans for Free Trade.
Still, Gennette said it’s too early to tell how the tariffs will affect consumers.
“In some cases you’re not going to see those costs absorbed and they’re going to get passed on,” the CEO of Macy’s said. “We’re going to absorb it where we can. We’re going to see how the customer votes on this.”
— CNBC’s Lauren Thomas contributed to this article.