President Donald Trump targeted Walmart (NYSE: WMT) in a social media post on Saturday, stating: “Walmart should STOP trying to blame Tariffs as the reason for raising prices… they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING.”
This comes after the retail giant warned this past week of “unprecedented” price hikes tied to US-China tariffs, despite a temporary reduction in duties from 145% to 30%.
“The magnitude and speed of these price increases is unprecedented,” Rainey said, citing examples like bananas rising to 54 cents per pound (up 8%).
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Walmart reported $648.1 billion in fiscal 2024 revenue and $15.5 billion in net income, yielding a 2.4% net income margin. Trump’s demand to absorb tariffs conflicts with these margins, which leave minimal room for cost absorption without price hikes or profit erosion.
“If the goal of tariffs is to reduce our trade deficit, the only way that will happen is if Walmart and other importers raise their prices. It’s higher prices that will cause consumers to buy fewer imports,” economist Peter Schiff noted. This underscores the tension between tariff policies designed to curb imports and Trump’s simultaneous insistence that retailers avoid passing costs to consumers.
The company plans summer price adjustments to offset supplier costs, even as it absorbs some tariffs to undercut rivals. Rainey acknowledged the “full impact of the trade war on consumers has yet to come,” though Walmart reported a 4.5% jump in U.S. comparable sales for Q1 2024, driven by high-income households and 22% global e-commerce growth.
Despite Rainey’s confidence that Walmart will “come out stronger,” the company’s unchanged full-year forecasts hinge on a precarious balance: raising prices enough to offset tariffs without alienating its core budget shoppers.
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