Walmart’s Chief Financial Officer, John David Rainey, has warned of possible price rises on some items if President-elect Donald Trump’s proposed tariffs on imports are implemented.
Speaking with news reporters on Tuesday, Rainey emphasized the company’s commitment to its “everyday low prices” model but acknowledged that tariffs could force adjustments.
The Impact of Proposed Tariffs
During his campaign, Trump proposed tariffs ranging from 10 percent to 20 percent on all imports, with some levies as high as 60 percent to 100 percent for goods from China.
These measures aim to boost domestic manufacturing but could significantly increase costs for retailers and consumers.
Rainey said it’s too early to determine which products would be affected, but he acknowledged that tariffs are generally inflationary.
He said:
“Our model is everyday low prices. But there probably will be cases where prices will go up for consumers,”
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Walmart’s Position in a Changing Trade Environment
Walmart, the largest US retailer, reported strong quarterly earnings and raised its full-year forecast, but the looming tariffs have cast a shadow over its plans.
The company has already been operating in a tariff-heavy environment for seven years and has adjusted by diversifying its supply chain.
Approximately two-thirds of the goods Walmart sells are made, grown, or assembled in the U.S., Rainey noted, which could help mitigate the impact of additional tariffs.
He said:
“We’ve been living under a tariff environment for seven years, so we’re pretty familiar with that.”
Walmart has also reduced reliance on China, sourcing more products from other regions to hedge against trade policy risks.
Rainey added:
“We want to work with suppliers and with our own private brand assortment to try to bring down prices.”
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Retail Industry Reacts
Walmart is not alone in voicing concerns over the potential impact of tariffs. Other major retailers, including Lowe’s, E.l.f. Beauty, and Steve Madden, have expressed apprehension about higher costs and the effects on consumers.
Lowe’s CFO, Brandon Sink, said about 40 percent of the company’s cost of goods sold comes from outside the US, making it particularly vulnerable to tariffs.
CEO Marvin Ellison added that the company is already preparing for possible scenarios by working with suppliers.
National Retail Federation CEO Matthew Shay described the tariffs as “a tax on American families” that would drive inflation, increase prices, and lead to job losses.
Inflation and Consumer Spending
The potential for higher prices comes at a time when inflation has moderated in the U.S., offering some relief to consumers after years of stretched wallets.
Tariffs, however, could reverse this trend, placing renewed pressure on households and retailers alike.
Rainey emphasized Walmart’s focus on mitigating price increases where possible, particularly through partnerships with suppliers and its private label brands.
“Tariffs are inflationary for customers,” he said, adding the company remains committed to finding ways to minimize the impact.
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A Broader Industry Shift
The prospect of tariffs has also prompted changes across the retail industry.
Steve Madden, for example, announced plans to reduce its imports from China by 45 percent over the next year to avoid financial strain.
Similarly, other brands are exploring supply chain diversification and pricing strategies to prepare for the potential fallout.
Looking Ahead
As the retail sector braces for the potential impact of Trump’s proposed tariffs, companies like Walmart are navigating a delicate balance between maintaining affordability for customers and managing higher costs.
With inflationary pressures and global supply chain dynamics already reshaping the industry, the addition of significant tariffs could further complicate the landscape.
While Walmart’s scale and diversified supply chain provide some protection, the company’s acknowledgment that price increases may be inevitable underscores the broader challenges facing retailers and consumers alike.
