Walmart executives say customers should expect prices to rise after they are expected to rise due to Donald Trump's trade war, and the president said big box retailers should not raise prices but absorb their tariff fees.
Trump posted on Saturday’s Truth Social “Walmart should stop trying to blame tariffs on the reasons for raising prices.” “Walmart made billions last year, far exceeding expectations. Between Walmart and China, it should 'eat' tariffs' without charging any fees to valuable customers. I’ll watch, and your customers will do the same!!!
Over the past month and a half, Trump has announced various tariff policies - starting at a higher and rather ridiculous rate of imports from most countries, and then most of them lower the tax rate to 10% outside of China 145%.
Earlier this week, the U.S. and China agreed to a 90-day pause, where they would reduce mutual tariffs from 125% to 10%. According to Trump's top 20% tariff on China, the current tariff on Chinese imports is 30% due to alleged punishment for failing to stop the flow of fentanyl from the United States.
Trump has admitted that his tariffs could lead to higher prices for parents and that Americans may need to spend less – specifically saying they can buy fewer dolls for their kids – but he also said the tariffs would make the U.S. rich.
"I want to thank President Trump and (Treasury Secretary Scott) for the recent progress," Walmart CEO Douglas McMillon said in a graduation call on Thursday. "We hope this will lead to a long-term agreement between the United States and China, which will lead to lower tariffs."
But the CEO warned that Walmart would raise prices on tariffs.
“We will try to keep prices as low as possible,” Macmillan said. “However, given the magnitude of the tariffs, we can’t absorb all the pressure even at the lower levels announced this week, given the reality of narrow retail margins.”
He added: “Higher tariffs will lead to higher prices.”
Walmart Chief Financial Officer John David Rainey told CNBC on Thursday that the tariffs were "still too high."
"We're low prices every day, but these increases are more than any retailer can absorb," he said. "It's more than any supplier can absorb. So I'm worried that consumers will start to see higher prices. You'll start to see that, most likely at the end of this month and then definitely more in June."
Walmart is the largest retailer in the United States, with countries that receive at least 10% tariffs from Canada, China, India, Mexico and Vietnam.
Commerce Secretary Howard Lutnick told CNN earlier this month that the Trump administration's tariffs would not be below 10%.
"We have been working to keep prices as low as possible and we won't stop. As long as we can give small retail margins, we will be as low as possible."
Wal-Mart made $4.45 billion in the first quarter of this year, compared with $51.1 billion in the first quarter of last year. Renney told the Associated Press that the price of banana imported from Costa Rica increased from 50 cents per pound to 54 cents. He said the price of car seats from China could rise from $350 to $450.