In a recent social media post, President Donald Trump launched a scathing attack on retail giant Walmart, suggesting that the company should absorb the extra costs imposed by his tariffs. As Trump has significantly increased import taxes, he has attempted to reassure a skeptical public that foreign producers would bear the burden of these taxes, while retailers and automakers would ultimately shoulder the additional expenses. However, numerous economic analyses dispute these claims, warning that such trade penalties could exacerbate inflation.
On Thursday, Walmart cautioned that the prices of essential items, ranging from bananas to children’s car seats, could see significant increases due to the tariffs. In response to these concerns, Trump expressed his dissatisfaction in a post on Truth Social, criticizing the retailer, which employs approximately 1.6 million individuals across the United States. He argued that Walmart, headquartered in Bentonville, Arkansas, should prioritize the welfare of consumers over profits in order to support his economic agenda, which he claims will eventually lead to increased domestic manufacturing jobs.
“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” Trump stated. “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!!!”
This post from the Republican president highlights the challenging decisions that major American companies face due to his tariffs, which could lead to declining sales and potential backlash from the Trump administration. The president has previously warned domestic automakers against raising prices, even though external analyses indicate that his tariffs would likely increase production costs.
Currently, the tariffs have cast a shadow over an otherwise stable U.S. economy. A preliminary reading from the University of Michigan survey of consumer sentiment revealed a concerning dip, reaching its second-lowest level on record. Approximately 75% of respondents mentioned tariffs as they anticipated inflation would rise further.
In April, Walmart CEO Doug McMillon was among retail leaders who met with Trump at the White House to discuss the implications of tariffs. Despite warnings from industry experts, the Trump administration proceeded with the tariff increases and has also criticized other companies, such as Amazon and Apple, for struggling with supply chain disruptions.
Walmart's Chief Financial Officer, John David Rainey, expressed concerns that a $350 car seat produced in China could soon see a price hike of $100, translating to a 29% increase. He remarked, “We’re wired to keep prices low, but there’s a limit to what we can bear, or any retailer for that matter,” following the company's announcement of strong first-quarter sales.
Recently, the Trump administration reduced the tariffs on China from 145% to 30% for a 90-day period. Additionally, Trump has enforced tariffs as high as 25% on Mexico and Canada due to issues related to illegal immigration and drug trafficking, which has strained relations with America’s two largest trading partners. A universal baseline tariff of 10% is currently in place for most countries, as Trump promises upcoming trade deals while maintaining that tariffs will continue to serve as a revenue source.
Moreover, Trump has placed import taxes on a variety of products, including autos, steel, aluminum, and is planning to do the same for pharmaceutical drugs. These tariffs, coupled with Trump's varying positions on tax rates, have created uncertainty within the U.S. economy. As a result, Federal Reserve Chair Jerome Powell has opted to keep the central bank's benchmark rates steady until more clarity emerges. Powell has cautioned that tariffs can hinder growth while simultaneously driving prices upward.
On Saturday, Trump reiterated his calls for Powell to decrease the benchmark rates, a move that could potentially accelerate inflation. Despite this, the president maintains that inflationary pressures have largely subsided within the economy. “Too Late Powell, a man legendary for being Too Late, will probably blow it again - But who knows???” Trump concluded in his social media post.
