Tariffs squeeze prominent US retailers as economic pressures mount

Prominent American retailers have reported significant headwinds tied to rising tariff costs, suggesting that the Trump administration's trade policies are beginning to take a toll on both financial performance and long-term planning.

Retailer Target lowers sales forecast amid tariff pressures

The Target Corporation has revised down its sales outlook following a challenging first quarter. Jim Lee, its chief financial officer (CFO), emphasized the role of tariffs in their revised projections, stating "we expect many of those Q1 themes to persist in the second quarter, with headwinds including continued sales pressure, tariff impacts and some additional costs."

Walmart warns of significant financial impact

Retail giant Walmart echoed similar concerns. In its Q1 earnings call, CFO John David Rainey warned that a potential return to drastically higher tariffs could have an impact on the company's financial health. He noted that a 145 percent tariff environment with China, combined with tariffs nearing 50 percent on imports from other countries, would be "not a good outcome for retailers" and "not a good outcome for the economy."

The company also announced plans to cut approximately 1500 jobs, reported the Wall Street Journal on Wednesday.

TJX Companies adjusts outlook over tariff costs

The TJX Companies, parent of off-price retailers like T.J. Maxx and Marshalls, reported that tariffs imposed in March and April have already begun to impact merchandise costs. In its Q2 fiscal 2026 outlook, the company acknowledged an "incremental negative impact from tariff costs on the merchandise it was committed to."

Markets plunge amid economic uncertainty

In addition to tariff uncertainties, the concerns voiced by major retailers come at a time of heightened volatility across US financial markets. On Wednesday, the Dow Jones Industrial Average fell 1.91 percent, the Nasdaq dropped 1.41 percent, and the S&P 500 declined 1.61 percent. Long-term Treasury yields surged, with the 10-year yield hitting 4.58 percent and the 30-year spiking to 5.08 percent. Meanwhile, the US dollar index fell 0.56 percent to 99.555 in late trading.

The widespread sell-off followed Moody's downgrade of the US sovereign credit rating from Aaa to Aa1 last Friday, amid growing federal deficit concerns linked to the administration's proposed tax-cut bill.