American retailers are staying a step ahead of President Donald Trump’s tariffs by stockpiling goods like clothing and furniture. This proactive approach has proven beneficial for TJ Maxx, despite not exclusively selling American-made products. Tariffs are essentially taxes imposed on imported goods to shield local industries from foreign competition. As a result, imported products become more expensive, with companies passing on the added costs to consumers through increased prices. President Trump recently initiated a 10% tariff on Chinese goods, while also introducing 25% tariffs on Mexican and Canadian goods, albeit delaying their implementation until March 1. TJX, the parent company of TJ Maxx, stands out in this environment due to its unique sourcing strategy. Rather than importing a large portion of its products directly from overseas factories, TJX predominantly acquires excess merchandise from designer brands post-importation. By selling these goods at discounted rates ranging from 20% to 60% below market prices, TJ Maxx avoids bearing tariffs on most of its inventory. Following Trump’s election, businesses hurried to boost their stockpiles and ramp up orders from suppliers to mitigate potential tariff impacts. Consequently, inventory levels among retailers surged by 2% annually in the third quarter of 2024. The strategic accumulation of inventory by TJX places it in a favorable position, as noted by analysts projecting increased benefits for the company. TJX’s tactic of seizing opportunities presented by supply chain disruptions, order cancellations, and overproduction aligns with its business model. Analysts believe that the chaos triggered by the tariffs will play into TJ Maxx’s hands, positioning it as a significant beneficiary. Unlike other retailers with heavy reliance on imports from countries affected by tariffs, TJX is expected to weather the storm due to its agile procurement approach. While some companies brace for price hikes and disruptions caused by tariffs, TJX’s opportunistic buying strategy offers a competitive advantage at a time of industry upheaval.
P The benefits of supply chain disruptions for a long time. The chain has been one of the strongest retailers over the past decade, in times of both economic growth and downturns. The company has also pressured traditional department stores like Macy’s and Kohl’s, which stand to lose out from tariffs because department stores rely heavily on imported merchandise. For more CNN news and newsletters create an account at CNN.com.
