U.S. President Donald Trump on Saturday publicly criticised Walmart, urging the retail giant to “eat the tariffs” rather than attributing its rising prices to the import duties implemented by his administration.
Walmart chief executive Doug McMillon said that the price increases are due to the tariffs imposed by the Trump administration being “too high,” especially those affecting goods imported from China.
“We will do our best to keep our prices as low as possible. 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,” McMillon added.
In a social media post, Trump responded and said, “Walmart should STOP trying to blame tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected.”
Previous reports indicate that the tariffs will place a heavier financial strain on lower- and middle-income Americans, who have traditionally made up the majority of Walmart’s customers. Additionally, consumers frequently rely on the retailer for essential, non-discretionary items like groceries.
Walmart, which operates more than 4,600 stores across the United States, sources merchandise from a variety of countries, including Canada, Peru, Costa Rica, Colombia, China, India, Mexico, and Vietnam.
“All of the tariffs create cost pressure for us, but the larger tariffs on China have the biggest impact,” chief executive McMillon said.
President Donald Trump had raised tariffs on most Chinese goods to a staggering 145%, but as part of a 90-day truce reached with China, that rate was reduced to 30% on Monday.
Trump indicated that if a long-term trade agreement is not achieved, the tariffs could rise again to “substantially higher” levels.
Meanwhile, Walmart chief financial officer John David Rainey said price adjustments at Walmart are expected to begin in May and will become more noticeable over time.
“The magnitude of the tariff increases, though, are so large that retailers can’t absorb these by themselves.”