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By Hugh Cameron
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Walmart executives have warned that the company will not be immune to the impacts of President Donald Trump's tariff agenda.
The company reportedly commenced negotiations with its foreign suppliers, requesting lower costs to ensure that these trade policies do not result in increases for its U.S. customers. However, it remains unclear whether shoppers will face higher prices at their local Walmart and how significant these could be.
Why It Matters
Walmart, the largest company in the United States by revenue, operates around 4,700 locations across the country. Any significant tariff-related price increases would, therefore, impact the millions of Americans who visit the big box retailer every day.
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What To Know
Walmart has long expressed fears that Trump's import tariffs could result in price hikes for its U.S. outlets.
Following Donald Trump's election, after a campaign that promised to enact sweeping tariffs to address the country's trade deficit and foster a renaissance for domestic business, Walmart Chief Financial Officer John David Rainey said these measures could increase costs.
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"We never want to raise prices," Rainey told CNBC in November. "Our model is everyday low prices. But there probably will be cases where prices will go up for consumers." He added that while Walmart has been living "under a tariff environment" since the first Trump administration, these prove "inflationary for customers."
Walmart is one of the largest private importers in the U.S., according to the Observatory of Economy Complexity, and continues to depend heavily on China, a key target of the president's aggressive trade reform efforts. However, in recent years, the company has sought to diversify its imports, with an increased emphasis on India.
As a result of this vulnerability, Walmart has recently attempted to persuade its Chinese suppliers to cut their prices by as much as 10 percent to spare consumers any inflationary effects of tariffs, Bloomberg reported last week, citing anonymous individuals familiar with the matter.
However, the sources told Bloomberg that these cuts were unlikely to be accepted, given the already razor-thin margins shouldered by the suppliers, some of whom would incur a net loss with even a two-percent reduction.
As a result, the Chinese government has reportedly summoned company representatives for discussions and potential punitive actions, according to the South China Morning Post, citing state media-affiliated social media posts.
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While some price increases are therefore expected, at least according to the company's executives, Walmart may be less exposed to tariff-related effects than some of its competitors, who have also warned of potential price increases.
Best Buy CEO Corie Barry declared these "highly likely" during a recent earnings call.
Walmart still makes, grows, or assembles the lion's share of its goods domestically—two-thirds of the merchandise sold in the U.S. and 93 percent sold in Walmart Mexico, according to the company's website. As Business Insider notes, the company's emphasis on grocery sales helps shield it from the effects that may impact competitors like Target, which is more dependent on imported merchandise.
What People Are Saying
Walmart CFO John David Rainey told CNBC in November: "We've been living under a tariff environment for seven years, so we're pretty familiar with that."
"Tariffs, though, are inflationary for customers," he added, "so we want to work with suppliers and with our own private brand assortment to try to bring down prices."
Rainey told the network last month that, while two-thirds of Walmart's products are domestically sourced, the company was "not going to be completely immune" from tariffs.
Jason Miller, professor of supply chain management at Michigan State University, told Business Insider: "Target is actually much more exposed than Walmart because Walmart is grocery-heavy and groceries are predominantly domestic."
Walmart CEO Doug McMillon said during the company's most recent earnings call: "Tariffs are something we've managed for many years, and we'll just continue to manage that. We've got a great team. We know how to do that. We can't predict what will happen in the future, but we can manage it really well. And we're wired to try and save people money. So that will be our ultimate goal."
A spokesperson for Walmart told Newsweek: "Walmart's purpose is to help people save money and live better. Our conversations with suppliers are all aimed at making our purpose a reality for millions of customers, and we will continue to work closely with them to find the best way forward during these uncertain times. We have a strong business in China and are proud of our associates around the world who are delivering for customers and members."
What Happens Next
In response to Trump doubling tariffs on Chinese imports to 20 percent last week and the 25 percent duties on global steel imports, Beijing has now responded with 10-15 percent tariffs on a host of agricultural imports. These tariffs took effect Monday.
Update 03/13/25, 4:40 a.m. ET: This article was updated with comment from Walmart.
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