President Donald Trump has issued a strong warning to American companies, insisting that they absorb the costs associated with tariffs rather than passing them on to consumers. This comes in response to Walmart’s recent announcement that it may need to increase prices due to the expensive global trade war. On Saturday, Trump took to Truth Social to express his disapproval, urging Walmart to reconsider its pricing strategy.
The administration’s rebuke of Walmart marks the third instance where the White House has publicly criticized a major U.S. corporation for considering price hikes attributed to tariff costs. Previously, on April 29, Amazon had contemplated adding a tariff surcharge to its Haul platform. In response, White House Press Secretary Karoline Leavitt labeled this potential move as both hostile and political. Following Trump’s direct intervention, Amazon decided against implementing the tariff surcharge.
Subsequently, on May 6, Trump threatened to impose a 100% tariff on Mattel after the company cited the need to raise prices. Mattel’s CEO, Ynon Kreiz, argued that the tariffs would not lead to increased U.S. manufacturing, as affordable toy production in America remains challenging.
Trump’s actions appear to target large corporations with substantial profits, reminiscent of previous criticisms of corporate price increases during inflationary periods. Despite Walmart’s substantial earnings last year, Trump believes the retailer can absorb the tariff costs without burdening consumers, though Walmart maintains that maintaining stable earnings for its shareholders is paramount.
Walmart’s CEO, Doug McMillon, emphasized that while the company will absorb some of the tariff costs, it cannot fully shield consumers due to narrow retail margins. With the ongoing pressure of tariffs, higher prices seem inevitable, notwithstanding the administration’s efforts to prevent them. As Walmart struggles to avoid transferring these costs to consumers, other businesses, including Home Depot and Target, may also face similar challenges.
The looming reality is that price increases are likely unavoidable in the current economic climate, with the president’s influence having limited effect on the broader market dynamics.
