Credit: MikeMozartJeepersMedia
Walmart executives said last week that the Trump administration’s tariffs will force price increases, an announcement that drew the ire of the White House and brought the looming costs of the tariff wars closer to consumers’ wallets.
Walmart CEO Doug McMillon told analysts the company would try to keep prices low, but “given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” The New York Times reported.
McMillon’s statement earned a rebuke from the president in a social media post, where Trump urged the company to “EAT THE TARIFFS.”
Whether it’s Walmart or you and me, somebody is going to have to eat them. That fact has many in the business community nervous. The last couple of months have seen uncertainty in stock and bond markets.
That wobble is not unexpected. Trump campaigned on imposing tariffs on items shipped into the U.S. and faced resistance from most economists, who predicted trouble ahead. Trump was unswayed.
On April 2 – a day Trump labeled as “Liberation Day” – Trump announced he was imposing tariffs on nearly every country in the world. Trump assigned a tariff of at least 10% for almost every country, with China at the highest rate of 84%.
Trump suspended the tariffs for 90 days after stock and bond markets dipped in reaction to the news. Since that time, Trump said he is negotiating trade deals and has raised and lowered the threatened tariff on Chinese goods from as high as 145% to 30%.
Despite what Trump might have told you, tariffs are, in fact, paid by the American entities importing goods from other countries, not by China and other exporters shipping their wares our way.
While Walmart said to expect price increases, other market watchers say large companies have much more leeway with establishing prices than they let on and that they or their suppliers could absorb the cost of the tariffs without passing the burn along to customers.
Walmart isn’t the only big company Trump has tried to bully into sucking up tariff costs. Last month, Amazon denied a report from D.C. political outlet Punchbowl News that the online retailer would show consumers the cost tariffs added to their prices. White House Press Secretary Karoline Leavitt called the move a “hostile and political act” by Amazon.
McMillon and the leaders of other big box retailers met with Trump to discuss the tariffs last month.
In other Walmart news, this week the Bentonville-based mega retailer announced plans they said are unrelated to the tariffs to slash 1,500 corporate jobs by the end of the summer.
The cuts come after changes in Walmart’s global technology operations, e-commerce fulfillment and advertising business, according to the Wall Street Journal.
