After Walmart executives said that customers should expect price hikes due to Donald Trump’s trade war, the president said the big box retailer should not raise prices and instead absorb the costs of his tariffs.
“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” Trump posted on Truth Social on Saturday. “Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!”
Over the past month and a half, Trump has announced various tariff policies — starting with high and fairly nonsensical rates on imported goods from most countries, before mostly lowering the rate to 10 percent outside of a 145 percent rate on China.
Earlier this week, the U.S. and China agreed to a 90-day pause where they will cut reciprocal tariffs from 125 percent to 10 percent. Based on Trump’s previous 20 percent tariff on China, as punishment for supposedly failing to stem the flow of fentanyl to the U.S., tariffs on Chinese imports are currently at 30 percent.
Trump has acknowledged his tariffs could lead to higher prices for parents and that Americans may need to cut back on spending — specifically arguing they can buy their children fewer dolls — but he has also said the tariffs will make America rich.
“I want to thank President Trump and [Treasury Secretary Scott] Bessent for the progress made recently,” Walmart CEO Douglas McMillon said in an earnings call Thursday. “We’re hopeful that it leads to a longer-term agreement between the U.S. and China that would result in even lower tariffs.”
But the CEO warned that Walmart will raise prices in response to the tariffs.
“We will do our best to keep our prices as low as possible,” McMillon said. “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.”
He added that “the higher tariffs will result in higher prices.”
Walmart Chief Financial Officer John David Rainey told CNBC Thursday that tariffs are “still too high.”
“We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb,” he said. “It’s more than any supplier can absorb. And so I’m concerned that [the] consumer is going to start seeing higher prices. You’ll begin to see that, likely towards the tail end of this month, and then certainly much more in June.”
Walmart, the largest retailer in the U.S., gets products from Canada, China, India, Mexico and Vietnam, all countries that have at least 10 percent tariffs.
Commerce Secretary Howard Lutnick told CNN earlier this month that the Trump administration’s tariffs would not go below 10 percent.
“We have always worked to keep our prices as low as possible and we won’t stop. We’ll keep prices as low as we can for as long as we can given the reality of small retail margins,” Walmart told CNN in a statement.
Walmart earned $4.45 billion in its first quarter this year, compared to $5.10 billion in its first quarter last year. Rainey told the Associated Press that the price of bananas imported from Costa Rica increased from 50 to 54 cents a pound. He said that the price of car seats from China will likely go from $350 to $450.
