By Niket Nishant, Shivansh Tiwary and Manya Saini

(Reuters) – Company executives were taking a wait-and-see approach to President-elect Donald Trump’s pledge to impose heavy tariffs on imports when he takes office in January, but many expressed concerns about the impact such taxes would have on inflation.

Several major U.S. companies have discussed tariffs at recent investor events and conference calls, including after the Nov. 5 election in which Trump edged Vice President Kamala Harris.

Walmart, the nation’s largest retailer, suggested prices could rise if tariffs increase after announcing results on Tuesday.

“We are concerned that significantly increased tariffs could lead to increased costs for our customers at a time when they are still feeling the remnants of inflation,” a Walmart spokesperson said.

Trump has vowed to put tariffs, which account for a portion of U.S. tax collections, at the center of his economic agenda. Executives are increasingly fielding questions on the issue, with many pointing to efforts to continue diversifying supply chains, especially away from China, Trump’s main target.

Since the beginning of September, executives at nearly 200 companies in the S&P 1500 Composite index have discussed tariffs on earnings calls or at investor conferences; That’s nearly double the same period ahead of the 2020 election, far more than the 23 announced. 2023 according to LSEG data.

“Approximately 40% of the cost of goods sold comes from outside the United States, and this includes both direct imports and national brands through our vendor partners,” Lowe’s CFO Brandon Sink said in a statement Tuesday. he said. “And when we look at the potential impacts (of tariffs), it will certainly add to product costs.”

Trump has floated the idea of ​​a 60 percent tariff on China, the world’s largest exporter, and a universal tariff of 10 percent or more, which he says is needed to eliminate the U.S. trade deficit.

Oxford Economics estimated that a 60% Chinese tariff could increase US inflation by 0.7 percentage points, and overall tariffs would increase inflation by 0.3 percentage points. Oxford believes any tariffs will be introduced gradually, but some analysts worry about the shock effect.

“Trump 47 will not be a repeat of Trump 45,” said Brian Jacobsen, chief economist at Annex Wealth Management, noting that the president-elect’s proposals are now “much more comprehensive.”

POTENTIAL SECTOR IMPACTS

According to the US International Trade Commission, the top importing sectors to the US include electronic products, transportation equipment, chemicals and minerals.

Taiwan, a key partner of the United States’ key semiconductor industry, was a target of Trump’s rhetoric ahead of the election. He suggested that Taiwan should pay for U.S. protection against the threat of China, which considers the island its territory, and accused Taiwan of smuggling its semiconductor industry.

Any retaliation could impact US tech giants such as Apple, Nvidia and Qualcomm, which see Taiwan as a vital component of their supply chains.

Tariffs could raise prices of clothing, toys, furniture, appliances, shoes and travel items, especially products for which China is a major supplier, according to the National Retail Federation, a US trade group of which Walmart is president.

“This is definitely one of the fastest things that can happen because it can happen with the stroke of a pen,” Stanley Black & Decker CFO Patrick Hallinan said at the Robert W. Baird investor conference last week. He said current tariffs cost about $100 million a year, which could be doubled under Trump’s proposals.

Of course, companies began shifting production away from China during Trump’s first term and have continued to do so following legislation aimed at boosting U.S. manufacturing during Joe Biden’s term.

U.S. imports of goods from China peaked at $538.5 billion in 2018 and were $433.3 billion in the 12 months ending in September, according to U.S. Census Bureau data.

Businesses may also be better prepared to handle shifts in the wake of the COVID-19 pandemic, multiple worker strikes and disruptions to key waterways like the Panama and Suez canals, executives said.

“We’ve had so many disruptions and challenges that have forced us to make adaptations. We’re pretty well-versed in managing that,” said Tapestry CFO Scott Roe.

(Reporting by Niket Nishant, Shivansh Tiwary and Manya Saini in Bengaluru; Additional reporting by Aishwarya Venugopal and Juveria Tabbasum in Bengaluru and Nick Brown in New York; Editing by Anil D’Silva)