Target has told its suppliers they have to eat the cost of the import tariffs imposed on goods from China, so it doesn't have to raise prices for its customers.
The Minneapolis retailer is among the companies affected by an escalation of the tariffs by the Trump Administration, with an extra 15 percent tariff taking effect on Sunday on $112 billion worth of goods.
The Associated Press reports that more than two-thirds of consumer goods the U.S. imports from China is taxed at a higher rate.
But Target is determined not to pass the extra costs onto its consumers as it enters the crucial holiday season, and has told its suppliers that it "will not accept any new cost increases related to the tariffs on goods imported from China."
It was revealed in a memo from Target's chief merchandising officer Mark Tritton to suppliers, as reported by The Motley Fool.
"Our expectation is that you will develop the appropriate contingency plans so that we don't have to pass price increases along to our guests," he wrote.
The new tariffs that went live on Sunday impacts several of Target's core products, including footwear and apparel, while new tariffs that will be introduced later in the year will affect tech items including laptops and cellphones.
"Impacted goods include a broad set of consumer categories," Tritton wrote, "including many of the goods you import, which are bought by the millions of American families who shop at Target every day."