In a bold statement, President Donald Trump has issued a stern warning to Corporate America: he will not hesitate to use his platform to publicly shame companies that opt to raise prices due to tariffs. This warning follows a recent announcement from Walmart, indicating that they would need to increase some prices as a result of the ongoing global trade war. In a post on Truth Social, Trump demanded that Walmart reverse its decision to hike prices.
Trump's message was clear: “Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” he stated. “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 rebuke marked the White House's third public reprimand directed at major American businesses contemplating price increases linked to hefty tariff costs.
On April 29, discussions surrounding price transparency at Amazon prompted a fierce response from the White House. Reports emerged that Amazon was considering displaying an additional tariff charge alongside prices on its Haul platform. During a press briefing, White House Press Secretary Karoline Leavitt showcased a photo of Amazon Chairman Jeff Bezos, labeling the potential move a “hostile and political act.” Following this, Trump, described by a senior official as “pissed,” reached out to Bezos to express his discontent, leading to a swift resolution where Amazon ultimately decided against the plan.
A week later, on May 6, Trump escalated his rhetoric, threatening a staggering 100% tariff on Mattel after the toy manufacturer indicated that price hikes were imminent. Mattel CEO Ynon Kreiz conveyed to CNBC that these tariffs would not facilitate toy manufacturing in America, as it would be financially unfeasible to sell toys at reasonable prices. Trump responded vehemently from the Oval Office, stating, “We’ll put a 100% tariff on his toys, and he won’t sell one toy in the United States, and that’s their biggest market.”
Trump's ongoing demands appear targeted at large corporations and their considerable profits, echoing former President Joe Biden's populist narrative of “greedflation.” This accusation suggests that companies raising prices are exploiting the inflation crisis. Trump highlighted Walmart's financial performance, stating, “Walmart made BILLIONS OF DOLLARS last year, far more than expected.” While this assertion is accurate—Walmart is the largest retailer in America and experienced strong performance in 2024—it's essential to note that Walmart's profit margins are relatively slim. The company's operating income was just over 4%, with a net profit margin of less than 3%, indicating that their profits are a result of scale rather than inflated prices.
Despite Trump’s assertions, Walmart CEO Doug McMillon has made it clear that while the company will absorb some of the tariff costs, they cannot take on the entire burden. He stated, “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.” This reflects the challenge faced by companies operating on thin margins while trying to manage the escalating costs of tariffs.
Despite Trump's aggressive stance against Amazon, Mattel, and Walmart, it is likely that other American brands will follow suit in raising prices. If Walmart, a company built on achieving massive scale and supply chain efficiency, cannot avoid passing costs onto consumers, it raises a critical question: which businesses can? Investors will closely monitor Home Depot and Target in the coming week for indications of trade war impacts and potential price increases.
As the economic landscape evolves, it appears that higher prices are on the horizon for American consumers. No degree of pressure from the president will likely prevent this reality, as companies navigate the complexities of tariffs and their implications on profitability.
