President Donald Trump wants Walmart to pay any cost of his tariffs, not its shoppers, as the White House on Monday continued to insist China would pay the costs of the tariffs.
Last Thursday, the world’s largest retailer said the tariffs were too high and too broad to for it to absorb on its own. Walmart CEO Doug McMillon told shareholders that tariffs will increase consumer costs no matter how hard the giant retailer tries to keep them down. McMillon said given the “magnitude of the tariffs,” the retail giant won’t be able to protect consumers from higher prices.
“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,” he said Thursday during the company’s first quarter earnings call.
Trump made it clear over the weekend that he doesn’t want consumers to face higher prices.
“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,” Trump wrote on Truth Social over the weekend. “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!!!”
Treasury Secretary Scott Bessent said he spoke to McMillon over the weekend about tariffs.
“Understand, that came from an earnings call,” Bessent told CNN. “On an earnings call – because of SEC requirements – they have to give the most draconian case.”
However, Bessent also said consumers could pay more.
“So Walmart will be absorbing some of the tariffs,” he said. “Some may get passed on to consumers.”
The White House denied on Monday that tariffs will raise consumer prices or that American companies will bear the higher costs.
“The reality is the president has always maintained that Chinese producers will be absorbing the cost of these tariffs,” White House press secretary Karoline Leavitt said during a briefing. “The president is committed to ensuring that prices remain low for American consumers and he maintains the position that foreign countries will absorb these tariffs.”
A tariff is a tax on imported goods that the importer pays, not the producer. The importer pays the cost of the duties directly to U.S. Customs and Border Protection, a federal agency.
Walmart isn’t the first company Trump has warned about tariffs. Trump immediately got on the phone with Amazon leaders after a report that the online commerce giant would display tariffs costs next to prices on its platform. Amazon denied it ever planned to list tariffs costs on its prices.
John David Rainey, Walmart’s chief financial officer, said the company would do its best to keep prices low but couldn’t say how much prices would increase.
“Keep in mind that we are a direct importer for many of the goods that we buy, but also there are other domestic importers that will then sell the items that they buy to us at a price which is indeterminate at this point in time,” he said Friday. “And so, that last piece makes it very difficult to say what the level of markups is going to be in our business.”
Some labor unions have also called on big companies to absorb the cost of tariffs. After Trump announced 25% tariffs on foreign automobile and auto parts in March, the United Auto Workers, a union that represents 400,000 active members, said carmakers should pay the bill. The auto union also wants Congress to pass regulations to make sure tariffs don’t hit consumers.
“As they shift their supply chains and investments to the U.S., auto companies that have enjoyed years of record profits should absorb the cost of these tariffs rather than passing them on to consumers, and the UAW would support legislative or regulatory action requiring them to do so,” the union said. “Workers must be held harmless during any disruption that accompanies the reshoring process, with financial support from the federal government if necessary.”
