Trump Says Walmart Should ‘Eat the Tariffs’ After Retailer Signals Price Hikes

The president says the retail giant should absorb costs after executives said the administration’s tariff policies will drive up consumer prices.

Customers shop at a Walmart store in Chicago, on May 18, 2023. Scott Olson/Getty Images

President Donald Trump said on May 17 that Walmart should absorb added costs rather than passing them on to U.S. consumers after the retailer said it would raise prices in response to U.S. tariff policy.

“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” Trump wrote in a social media post on May 17. “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!!!”

The rebuke came days after Walmart executives said that recent increases in import duties would begin affecting shelf prices later in May.

“Our short- and longer-term opportunities are clear,” Walmart CEO Doug McMillon said during a May 15 earnings call. “The immediate challenge is obviously navigating the impact of tariffs here in the U.S.

“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 [May 12], we aren’t able to absorb all the pressure given the reality of narrow retail margins.”

Under a recent agreement with China, the United States reduced tariffs on Chinese goods from 145 percent to 30 percent for a 90-day period.

John David Rainey, Walmart’s chief financial officer, said the lower rate is still too steep.

“We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb,” Rainey told CNBC. “You’ll begin to see that, likely towards the tail end of this month, and then certainly much more in June.”

However, former Walmart CEO Bill Simon questioned the company’s rationale, noting that general merchandise prices had declined last quarter even as gross profit margins expanded.

“So that sort of gives them room, in my view, to manage any tariff impact that they would have,” he told CNBC in an interview.

Walmart executives said the company is taking steps to limit the impact on consumers by working with suppliers to shift sourcing, substitute materials, and adjust product mixes. Still, they said some price increases are likely unavoidable.

“We’re positioned to manage the cost pressure from tariffs as well or better than anyone,“ McMillon said on the May 15 earnings call. ”But even at the reduced levels, the higher tariffs will result in higher prices.”

In response to an inquiry from The Epoch Times about Trump’s remarks, Walmart said it will do everything it can to manage rising costs and deliver affordable prices for customers—while emphasizing the challenges posed by narrow profit margins.

“We have always worked to keep our prices as low as possible and we won’t stop,” Joe Pennington, director of corporate affairs at Walmart’s Global Press Office, told The Epoch Times via email. “We’ll keep prices as low as we can for as long as we can given the reality of small retail margins.”

Trump’s comment on Walmart comes on the heels of a separate episode involving Amazon, in which the company denied that it had considered displaying the tariff impact on product prices on its website. The White House criticized the alleged plan as a “hostile and political act,” with press secretary Karoline Leavitt accusing Amazon of targeting the administration while turning a blind eye to inflation under President Joe Biden.

She also alleged ties between the company and Chinese propaganda outlets. Amazon denied the reports, and Trump later praised Jeff Bezos, Amazon executive chairman, for “doing the right thing.”

Since taking office, Trump has pursued an expansive tariff policy aimed at reshaping global trade relationships. The administration says the tariffs are necessary to level the playing field after years of trade imbalances and unfair practices by other countries.