Best Buy (BBY) is preparing for President-elect Donald Trump's plans to implement new tariffs.

On Monday, Trump posted on Truth Social that his administration plans to impose an additional 10% tariff on imports from China and a 25% tariff on imports from Mexico and Canada on Jan. 20, his first day in office. But American shoppers are likely to suffer higher prices as a result. 

"I absolutely can see a world where there's more consumer impact because the cost of those tariffs ends up flowing through to the consumer," Best Buy CEO Corie Barry told reporters on a media call. 

She noted that vendors have "very, very small margins in this industry, which means the vast majority of that tariff will probably be passed on to the consumer as a price increase."

Roughly 60% of Best Buy's products come from China, and Mexico is its second-largest supplier, as many companies have moved production of larger items to the country in the last five years. Items produced there include appliances, desktop computers, and large TVs. The business doesn't import anything from Canada.  

Read more: How do tariffs work, and who really pays them?

Other electronics that could be affected include tablets, phones, and some TVs.

The news comes as Best Buy is struggling to woo shoppers. On Tuesday, the retailer posted negative same-store sales growth for the 12th consecutive quarter.

Best Buy did not specify what sort of price increase would go into effect.

Roberto Machado Noa via Getty Images

Potential mitigation tactics the company and its vendors are looking into include importing products ahead of tariffs going into effect, making decisions around which products it offers, changing supply sources, and seeking to diversify to other countries that might offer viable alternatives. 

SharkNinja (SN), which sells its products at Best Buy, said the company has been diversifying its supply chain for the last five years.

"The majority of that product is able to be made today outside of China," SharkNinja CEO Mark Barrocas told Yahoo Finance at Goldman Sachs' Global Retailing conference in September. "We intend to have all of our US production made outside of China by the end of 2025."

Best Buy stock is under pressure, falling more than 7% on Tuesday. Year to date, shares are up nearly 17%, compared to a 27% gain for the S&P 500 (^GSPC). 

Tariffs are a headwind for all general merchandise retailers that sell categories like apparel, furnishings, and electronics. During Trump's first term, companies dealt with Chinese tariffs by eating the costs or passing them on, Scott Lincicome of Stiefel Trade Policy Center told Yahoo Finance.

Goldman Sachs managing director Kate McShane told Yahoo Finance that if Trump's tariffs from 2018 to 2019 were an indication, companies are likely to raise prices if more tariffs are added.

"If there were to be tariffs, I think it would be inflationary for most retailers. In the past, what we've seen from tariffs is that prices go up," she said earlier this year.

Walmart (WMT) CFO John David Rainey told Yahoo Finance's Morning Brief earlier this month that the company is "very accustomed" to "living in a tariff environment" over the past seven years. 

He added, "We're always going to look to work with our suppliers or use our own private brand assortment to try to bring down prices for customers ... we'll have to navigate that environment. Tariffs are inflationary for customers, but we want to work to bring down prices."

Nearly two-thirds of Walmart's annual product spend is on items that are made, grown, or assembled in the US.

"It's pretty drastic how it will impact earnings," TD Cowen analyst Oliver Chen told Yahoo Finance. "But I think this is all a starting point for negotiation. ... Overall earnings per share hits could be mid-single to high-single [digits], if not more, and the pass-through of the pricing" is what matters.

He said retailers such as Walmart, Target (TGT), and Costco (COST) "have a lot of experience with supply chain," but "customers are probably not willing to accept price increases" after years of high inflation. 

“Effective trade policies will increase America’s competitive advantages in research, development, and innovation and will protect strategically critical infrastructure," National Retail Federation CEO Matthew Shay told Yahoo Finance.

"However, the adoption of across-the-board tariffs on consumer goods and other non-strategic imports amounts to a tax on American families," Shay added. "It will drive inflation and price increases and will result in job losses."

Barry said that won't be the case. 

"I do not see a world right now where we're laying off employees or closing stores as a result of tariffs," she said.

—

Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

Click here for all of the latest retail stock news and events to better inform your investing strategy