Dollar Tree could change prices, remove merchandise amid Trump's tariff plan

CHESAPEAKE, Va. (WAVY) – The interim CEO of Dollar Tree said the discount chain could increase prices or even remove certain items from sale if Donald Trump follows through on his tariff plan.

Currently, the base price of many products at Dollar Tree is $1.25. But on Wednesday, CEO Mike Creedon announced in an earnings call that a price hike is possible on certain items if the president-elect imposes taxes on goods that make up the stores' inventories.

Specifically, Creedon discussed plans to mitigate the potential tariffs by using the "flexibility" of the store's "multi-price" system, which refers to Dollar Tree's range of items priced above the $1.25 base price.

Dollar Tree could also shift where it sources its items if the tariffs take effect, Creedon said.

The announcement comes as Dollar Tree's Chief Financial Officer Jeff Davis prepares to step down from his role.

Trump has said he plans to impose a 25% tariff on products from Mexico and Canada, as well as an additional 10% on goods from China. The proposed tariffs could impact products like steel and plastic from Canada, cars from Mexico, and smartphones and computers from China.

Dollar Tree's executives did not indicate which of its merchandise categories could be affected by the proposed tariff plan, nor which "non-economical items" could be removed from store shelves.

With Wednesday's announcement, the company also indicated that it may alter product specifications or change the sizes of their products to mitigate any tariff issues.

"Based on our scale and our past history of navigating through similar challenges, we believe there is a wide range of potential actions we can take to help mitigate additional tariffs if and when they materialize," Creedon said.

Rodney Lake, the director of the George Washington University Investment Institute, told Nexstar's WAVY that consumers should expect to feel price increases from major companies when and if the tariff plan is implemented.

"You could see these higher prices because it's unlikely, for example, that these companies are going to take these big detriments to their bottom line, they're going to pass that along," Lake said.