Fresh back from his Middle Eastern tour, President Donald Trump turned his attention to domestic economic issues on Saturday, lashing out at Walmart for its announcement that prices will start going up this month as tariffs on imports start to bite.
America’s largest retailer warned customers this week that price increases for many products are imminent because, as the company’s chief financial officer, John David Rainey, said, the tariffs are “still too high” — even with the recently announced agreement to lower duties on imports from China to 30 percent for 90 days.
The president has long insisted that tariffs are a tax on foreign countries. However, they are a tax on imports collected at the border and paid for by the importer, raising the end price of goods for American shoppers.
On Saturday morning, Trump appeared to acknowledge this, saying that Walmart should “eat the tariffs” and not pass the higher cost of sourcing goods on to its customers.
He wrote on Truth Social: “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. 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!!!”
Rainey told CNBC this week: “We’re wired for everyday low prices, but 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 consumer is going to start seeing higher prices,” he said. “You’ll begin to see that, likely towards the tail end of this month, and then certainly much more in June.”
Walmart’s first-quarter profit slipped as the company said it was not immune to the impact of the tariffs. The company expects sales to increase 3.5 percent to 4.5 percent in the second quarter, but did not issue a profit outlook because Trump’s tariff policies are constantly changing.
Walmart is among the first U.S. retailers to report its financial results for the first quarter, giving a snapshot of the mood of American shoppers.
Trump’s tariffs have increased the cost of toys, strollers, and appliances, among other products, after he slapped a base rate of 10 percent duties on goods entering the U.S. from most countries.
Walmart’s CEO Doug McMillon said that the company will “do our best” to keep prices low, but echoed Rainey’s comments.
“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 said.
Many Americans have been pulling back on spending as they grow uneasy about the economy, and inflation remains elevated.
U.S. consumers spent slightly more at retail stores in March to get ahead of the then-widely expected tariffs, which Trump announced on April 2, dubbed by him as “Liberation Day.”
Sales at retail stores and restaurants rose just 0.1 percent in April from March, a sharp slowdown from a 1.7 percent gain in the previous month.
Consumer prices have risen 2.3 percent in April compared with a year earlier, according to the Department of Labor report published Tuesday.
Trump says his intention is to encourage U.S. consumers to buy American products, stimulate domestic manufacturing, and create jobs.
For decades, American consumers have been used to low-cost foreign-made goods filling shelves at big box stores such as Walmart. Retailers have been sounding the alarm for months that Trump’s trade policy could bring that to an end.
A photo posted on Reddit appears to show how much the price of something as simple as a phone charging cable is going up.
The $9.99 USB-C cord from the store’s in-house Heyday brand now costs $17.99, according to the poster, identified as a Target employee by The Daily Mail.
Trump even admitted at his most recent Cabinet meeting that Americans — particularly children, apparently — should prepare to expect less and to pay more for that.
The president said: “Well, maybe the children will have two dolls instead of 30 dolls.”
He also suggested those two dolls could “cost a couple of bucks more than they would normally.”
When Mattel, the creator of Barbie, Hot Wheels, Uno, American Girl, and more, said it would diversify its production to other countries, but not the U.S., Trump threatened to retaliate.
Ynon Kreiz, chairman and CEO of Mattel, told CNBC in early May that, regardless of tariffs, costs are too high in the U.S. to produce affordable toys for even the American consumer.
Kreiz said that a “significant portion” of toy creation does occur in the U.S., such as design, development, product engineering and brand management, but that producing toys overseas allows them to create a “quality” and “affordable” product.
When asked about the statement, Trump said: “That’s ok. Let him go, and we’ll put a 100 percent tariff on his toy, and he won’t sell one toy in the United States, and that’s their biggest market.”
