Home Depot launches genius answer to tariff concerns
The home improvement retailer is working hard to bring prices down for customers.
The American retail space is an increasingly difficult one to navigate.
Most companies are having a harder time deciphering not if, but when price increases are going to happen.
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The rising cost of living has made it hard enough for many businesses to convince customers to shop at their stores.
And now, a broad array of tariffs imposed on many of the biggest U.S. trading partners is going to make the cost of many goods even more expensive.
Countries like Vietnam, Japan, and South Korea will now be hit with a 10% tariff on imported goods.
And the U.S. is in a game of chicken with China; imported Chinese goods were previously given a 145% tariff, which China reciprocated with a 125% tax on imported U.S. goods.
While that seems to be off the table for at least the next 90 days, higher tariffs are still in place between both countries.
The U.S. will impose a 30% tariff on China, while China will impose a 10% tariff on American products. Image source: Shutterstock
Retailers rely on China
Many retailers are highly reliant on China for their inventory.
It's estimated that Walmart gets over two-thirds of its stock from Chinese manufacturers. Amazon and Apple are also heavily reliant on the Asian trading partner, with a bulk of third party parts and electronics originating from there.
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And while Home Depot (HD) sources less of its inventory, on average, from China, it's still reliant on the country for many products, including flooring, lighting, decor, plumbing, and electrical products.
Lumber is a broadly more domestic product, with up to 90% of it coming from the U.S.
But that doesn't mean that Home Depot isn't feeling the pinch when it comes to tariffs.
The massive home improvement store said in its most recent 10-K filing that tariffs “could significantly, adversely impact the cost of, demand for and profitability of retail product sales in our U.S. or other locations.”
Home Depot launches sale
Still, Home Depot is working to bring down costs to shield its customers from politics and price hikes.
It has been working to diversify its suppliers and source more goods from the U.S.
And in the meantime, Home Depot is hosting its annual Memorial Day sale, which is highly anticipated for DIY enthusiasts and folks who just like to stock up on goods for around the house, from batteries to storage bins.
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The sale, which runs from May 15-26, will see deep discounts on some of Home Depot's most popular items, including:
- John Deere Riding Mower: $2,399 (was $2,999)
- Lifesmart Hot Tub: $3,899 (was $6,499)
- Dewalt 6 Tool Combo Kit: $499 (was $899)
- Hampton Bay Outdoor Patio Set: $499 (was $689)
- Heatmax Propane Fire Pit: $296 (was $377)
- Dewalt Miter Saw: $399 (was $599)
New products are added to the sale regularly, and Home Depot will feature a Special Buy of the Day, where customers can get a limited-time sale price on select items.
