Target, a popular US retail store, has reported a big drop in sales. The company says this is because of new trade taxes (called tariffs) and other challenges. Sales fell by 5.7% in the last three months. Target also faced problems after it stopped some diversity and inclusion programs.

Why Are Sales Down?
Target sells things like home furniture, clothes, and beauty products. Many of these items come from China. The US government, led by President Donald Trump, has put higher taxes on goods from China. This makes it more expensive for Target to bring in products.

Brian Cornell, Target’s CEO, said the company is trying to buy more products from the US instead of China. This could help avoid higher costs. But if prices go up, Target says raising prices for customers will be a “last resort.”

How Is Target Handling the Tariffs?
Rick Gomez, Target’s chief commercial officer, said the company is talking to suppliers and looking for new ones outside China. They are also changing how much they order and when. He said these steps should help reduce the extra costs from tariffs.

Comparison with Walmart
Walmart, another big US store, sells more everyday items like food and toilet paper. Since people always need these things, Walmart is less affected by tariffs. But Target sells more non-essential items, so when prices go up, people buy less.

Last week, Walmart said it would raise prices because of tariffs. Trump responded by saying Walmart should “eat the tariffs” instead of making customers pay more.

What’s Happening with US-China Trade?
The US and China recently agreed to lower some tariffs, but taxes on Chinese goods are still higher than before. Trump wants businesses to buy more American-made products to help US jobs. But experts warn this could make things more expensive for shoppers.

Target’s Diversity Policies and Backlash
Earlier this year, Target stopped some of its diversity, equity, and inclusion (DEI) programs. The Trump administration does not support these policies, and many companies have cut back on them.

Some Target shareholders sued the company, saying it hid the risks of its DEI policies. They pointed to a 2023 boycott over LGBTQ+ products, which hurt sales.

Brian Cornell said ending some DEI policies did affect sales, but he couldn’t say by how much.

What’s Next for Target?
Target now expects sales to drop slightly this year. Before, it thought sales would grow by about 1%. The company is working hard to manage costs and keep prices low for customers. But with tariffs and policy changes, the road ahead is tough.

Target is facing challenges from higher tariffs and changes in its policies. Sales have dropped, and the company is trying to find ways to cut costs. While it hopes to avoid raising prices, the situation remains uncertain. The US-China trade war and shifting customer attitudes will play a big role in Target’s future.