24 States Push to Scrap Trump Tariffs: Which Import-Heavy Retailers Stand to Gain the Most?
A coalition of 24 US states has filed a petition with the national trade court seeking to invalidate the latest round of tariffs imposed by the Trump administration, spotlighting the economic drag on businesses reliant on imported goods. This legal challenge arrives amid ongoing trade tensions, where tariffs—particularly on Chinese imports—have inflated costs for retailers sourcing apparel, home goods, and consumer products from Asia. For import-heavy chains like Walmart, Target, and Nike, a rollback could unlock meaningful margin expansion, but which names offer the best risk-reward?
The push for tariff relief comes at a pivotal moment. Over the past year, escalating duties under Section 301 and new global tariffs have squeezed gross margins across retail, with companies like Target noting that roughly half their merchandise is imported, primarily from China. Walmart disclosures highlight less than one-third of US sales as imported but still flag China, Mexico, Vietnam, and India as key sources. Home Depot and Lowe's echo similar vulnerabilities in tools and furnishings, while Nike's apparel supply chain is deeply exposed to Asia. A successful court challenge could refund prior duties and halt future hikes, directly boosting profitability in a high-inflation environment where pricing power is limited.
Walmart (WMT): Scale Shields but Imports Still Bite
Walmart, the world's largest retailer, sources less than one-third of its US merchandise from imports—mainly China, Mexico, Vietnam, India, and Canada—but tariffs remain a noted risk in recent 10-Qs and 10-Ks. A rollback would ease sourcing costs, supporting everyday low prices and market share gains. FY2026 revenue hit $713 billion (up from $681 billion in FY2025), with gross margins steady at ~25% TTM.
| Metric | Value |
|---|---|
| Market Cap | $1.01T |
| FY2026 Revenue | $713B |
| Revenue Growth TTM | 4.7% |
| Gross Margin TTM | 24.9% |
| EBIT Margin TTM | 4.2% |
| P/E TTM | 46.3 |
| Price Return YTD | 11.7% |
Verdict: Bull. WMT's diversification limits upside vs. peers, but refund potential and supply chain scale make it a steady winner.
Costco (COST): Membership Model Absorbs Hits, Rollback Accelerates Growth
Costco's warehouse model relies on bulk imports, with filings warning of tariff impacts on merchandise costs. Management highlighted fluid tariff exposure in recent earnings, including IEEPA refunds. FY2025 revenue reached $275 billion, with TTM growth at 8.4%—outpacing peers—fueled by membership fees less sensitive to goods pricing.
| Metric | Value |
|---|---|
| Market Cap | $443B |
| FY2025 Revenue | $275B |
| Revenue Growth TTM | 8.4% |
| Gross Margin TTM | 12.9% |
| EBIT Margin TTM | 3.8% |
| P/E TTM | 51.8 |
| Price Return YTD | 17.2% |
Verdict: Bull. Tariff relief would amplify fresh and non-food comps, but premium valuation tempers conviction.
Target (TGT): High Import Exposure Meets Attractive Valuation
Target sources ~50% of merchandise from abroad, with China dominant; recent 10-Ks detail tariff risks and first-sale declaration reliance. A rollback could reverse margin pressure, aiding comp recovery. FY2025 revenue was $105B (down slightly from $107B prior), but TTM growth stabilized at -0.3% with EPS at $8.13.
| Metric | Value |
|---|---|
| Market Cap | $55B |
| FY2025 Revenue | $105B |
| Revenue Growth TTM | -0.3% |
| Gross Margin TTM | 27.3% |
| EBIT Margin TTM | 5.3% |
| P/E TTM | 13.8 |
| Price Return YTD | 16.5% |
Verdict: Strong Bull. Lowest P/E and high exposure position TGT for outsized gains.
Home Depot (HD): Pro Tools and Imports Vulnerable
HD's supply chain risks include tariffs on imported tools and outdoor goods from China; 10-Ks note diversification efforts amid trade disputes. Rollback would support Pro sales (mid-single-digit growth targeted). FY2025 revenue: $165B, with 3.2% TTM growth and robust FCF at $12.6B.
| Metric | Value |
|---|---|
| Market Cap | $336B |
| FY2025 Revenue | $165B |
| Revenue Growth TTM | 3.2% |
| Gross Margin TTM | 33.3% |
| EBIT Margin TTM | 12.7% |
| P/E TTM | 23.6 |
| Price Return YTD | -0.9% |
Verdict: Bull. Housing headwinds linger, but tariff relief bolsters margins.
Lowe's (LOW): Similar Exposure, Pro Focus Differentiates
Lowe's flags China/Mexico imports in risk factors, with tariffs hiking private-label costs. Recent acquisitions like FBM expand reach, but relief would aid comps (flat to +2% guided). FY2025 revenue: $86B, TTM growth 3.1%.
| Metric | Value |
|---|---|
| Market Cap | $137B |
| FY2025 Revenue | $86B |
| Revenue Growth TTM | 3.1% |
| Gross Margin TTM | 33.5% |
| EBIT Margin TTM | 11.8% |
| P/E TTM | 20.6 |
| Price Return YTD | -1.9% |
Verdict: Bull. Pro loyalty and AI tools enhance upside from cost savings.
Nike (NKE): Apparel's Asia Reliance Makes It Prime Beneficiary
Nike's supply chain is heavily Asia-tied; earnings note tariff headwinds to gross margins (down 175-225bps ex-tariffs). Rollback aligns with sport offense reset. FY2025 revenue: $46B (down), but running/football growth signals rebound.
| Metric | Value |
|---|---|
| Market Cap | $63B |
| FY2025 Revenue | $46B |
| Revenue Growth TTM | -2.7% |
| Gross Margin TTM | 40.8% |
| EBIT Margin TTM | 6.0% |
| P/E TTM | 28.0 |
| Price Return YTD | -13.4% |
Verdict: Bull. Highest margins amplify relief, despite recent weakness.
Ranked Conviction: Tariff Rollback Winners
- TGT (Best value/exposure combo; P/E 13.8, 50% imports). 2. NKE (Margin lever, undervalued post-reset). 3. LOW (Pro tailwinds). 4. HD (Scale but housing drag). 5. WMT (Limited exposure). 6. COST (Rich valuation caps upside).
Risks include court rejection (monitor ruling by Q3), retaliatory actions, or supply shifts muting benefits. Watch Q2 earnings for tariff commentary and gross margin inflection >100bps as key signals.