American mega retailer Walmart said it would do its best to keep prices low for as long as it can, but could not promise to absorb the impact of tariffs on its products, even after President Donald Trump demanded that the company do so.
Over the weekend, the president complained that Walmart, the largest retailer in the U.S., was blaming his recent tariffs for “raising prices” and asserted the company could “eat” the additional cost of tariffs without passing them onto consumers.
Like many other retailers, Walmart has warned that Trump’s tariffs on nearly every one of the U.S.’s trading partners could mean the company may need to raise consumer prices.
In response to the president, a spokesperson for Walmart said, “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.”
Last month, Trump unveiled his global tariff plan, which includes a 10 percent baseline tariff for most countries and “reciprocal” tariffs on China, Japan, South Korea, India and other major trading partners.
Trump asserts his tariff plan is necessary to secure the U.S. with fairer trading policies. He believes it will bring in billions of dollars and boost domestic manufacturing.
But the deal rollout caused chaos in global stock markets over fears of rising consumer prices, inflation and a potential recession.
Since then, the president has eased some of those tariffs – dropping China’s 145 percent tariff to 30 percent and delaying global tariffs for 90 days as the U.S. seeks to make deals with other countries.
But fears about rising consumer prices have not gone away.
John David Rainey, the chief financial officer of Walmart, told CNBC last week that while Walmart is “wired for everyday low prices,” the “magnitude of these increases is more than any retailer can absorb.”
“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,” Rainey told CNBC.
Other retailers, such as Mattel, have issued similar warnings to investors and consumers, but Trump has continued to refute that, demanding companies keep prices low or threatening to impose higher tariffs on specific products.
