Retail

Best Buy CEO hopes tariffs won't result in a trade war

Key Points
  • Best Buy CEO Hubert Joly says he fears retaliation as a result of tariffs.
  • President Trump later announces plans to slap tariffs on steel and aluminum imports next week.
Hubert Joly, executive chairman and former chief executive officer of Best Buy
Scott Eells | Bloomberg | Getty Images

Best Buy CEO Hubert Joly said Thursday he fears retaliation as a result of U.S. tariffs.

He spoke in anticipation of President Donald Trump's announcement about levies on imports.

"I want to respect whatever decision is made, but we know that various economies are very dependent on what happens," Joly told CNBC on a call with media.

Trump later announced plans to slap tariffs on steel and aluminum imports starting next week.

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Joly, originally from France, recalled Europe's trade wars of the 1930s.

"My hope, as of member of this country, is that whatever happens here does not result in a trade war," Joly told CNBC. "This is a world of interdependence, and it needs to be a fair world."

The protectionist policies on certain metals follow Trump's approval of tariffs on imported solar cells and certain washing machines earlier this year.

"We have seen price increases from [foreign manufacturers of washing machines], and then followed by price increases from U.S. manufacturers ... of around $50, if memory serves," Joly said.

Home Depot Chief Financial Officer Carol Tome told CNBC in late February that "tariffs are bad for consumers." Tome added that domestic manufacturers of washing machines were increasing their prices to take the opportunity to grab extra profit margin.

"In the bill ... for the rest of the products, steel/aluminum is a very small component of [Best Buy's] cost structure," Joly said Thursday. Whatever happens to Best Buy's products because of the tariffs, he said, would be "negligible."

CNBC has been monitoring pricing on washing machines with the help of Market Track and Nerdwallet since late January.

Market Track found the tariff on imported washing machines "appeared to cause an immediate retail price reaction in the days after the tariff was effective." However, data from both Market Track and Nerdwallet have since shown that pricing on washing machines has normalized.