After the American retail giant Walmart warned of price increases in response to tariffs, Trump told Walmart to &#34;absorb the tariff costs themselves!&#34;
On Saturday, Trump criticized Walmart on the social media platform Truth Social, demanding that the largest American retailer bear the potential upcoming tariff costs instead of passing them on to consumers. Trump wrote:
<blockquote>
Walmart should stop blaming tariffs for price increases across the entire supply chain. Walmart made billions of dollars last year, far exceeding expectations. Walmart should &#34;absorb the tariffs&#34; instead of charging any fees to valued customers. I will be watching you, and your customers will too!!!
</blockquote>
These remarks directly targeted Walmart CFO John David Rainey's statement on Thursday, according to Xinhua News Agency. On the 15th, executives from the American retail giant Walmart stated that due to U.S. tariff policies, the company would begin raising prices on some products in the U.S. later this month. Rainey bluntly warned:
<blockquote>
If you haven't seen price increases at Walmart yet, they will become increasingly apparent starting in May. The magnitude and speed of price increases will be unprecedented, if something has a 30% tariff, you will likely see double-digit price increases.
</blockquote>
<h2>Absorb the tariff costs? A bit unrealistic</h2>
As the largest retailer and grocer in the U.S., Walmart is often seen as a barometer of the retail industry and the health of American consumers, and its insistence on a &#34;low price&#34; core strategy makes absorbing tariff costs seem a bit unrealistic.
On Saturday, in response to Trump's post, Walmart issued a statement saying it would work with suppliers to keep prices low as much as possible. Rainey stated:
<blockquote>
We have always been committed to keeping prices low, and that will not change. Given the thin profit margins in retail, we will keep prices low for as long as possible.
Walmart will absorb some of the higher costs associated with tariffs, and suppliers are also expected to absorb some of the higher costs.
</blockquote>
Some netizens pushed back against Trump, saying:
<blockquote>
Walmart's profit margin is 2%, where do you expect them to absorb costs? Grow up and don't be so naive.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/ce249925-05c7-4065-88e5-774477df2ff8.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/ce249925-05c7-4065-88e5-774477df2ff8.png"/>
</blockquote>
<h2>The retail industry under the shadow of tariffs: The price increase army is gathering</h2>
Walmart is just one of many companies that have raised prices or warned of price increases, and it is the largest among them. Other companies have also followed suit:
<blockquote>
Microsoft has stated that it has raised the suggested retail prices for Xbox game consoles and some controllers;
Barbie doll manufacturer Mattel announced that it expects to raise toy prices;
Ford warned last week that it would have to raise prices on certain models;
Luxury brand Hermès also stated that prices in the U.S. market will rise;
</blockquote>
Analysis suggests that Walmart's move will open the floodgates for price increases across the retail industry. Neil Saunders, Managing Director of GlobalData, stated that a low-price-centric player like Walmart raising prices explains why other retailers may follow suit.
Investors should pay attention to major U.S. retailers, including Target, Home Depot, and Lowe's, which are expected to share their assessments of the impact of tariffs when they release earnings reports next week. These reports may provide investors with a more comprehensive perspective on the impact of tariff policies on the entire retail industry.
Regarding Trump's statements on the impact of tariffs, what does it mean for U.S. stocks? Some analysts suggest that bearish events have already occurred.
<blockquote>
Initially focused on the pharmaceutical industry, attention has now shifted to Walmart, while also awaiting further news on movie tariffs. If a comprehensive tariff decision is announced within 2-3 weeks, it could become a turning point for the market (similar to &#34;April 2&#34;). Additionally, at the end of the month, funds will flow significantly from the stock market to the bond market.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/5b2fcaa8-0110-46ef-86bb-f849cbb91074.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/5b2fcaa8-0110-46ef-86bb-f849cbb91074.png"/>
</blockquote>

In response to Walmart's price increase to cope with tariffs, Trump urged them to "absorb the tariff costs themselves!" However, as a player focused on low prices with only a 2% profit margin, it seems unrealistic to expect them to bear the tariff costs themselves

- Walmart has warned of price increases due to impending tariffs, prompting Trump to urge the retailer to absorb the costs instead of passing them to consumers.  
- Walmart's CFO indicated that price hikes would become evident starting in May, with potential double-digit increases on certain items due to tariffs.  
- The situation reflects broader retail trends, as other companies like Microsoft and Ford also announce price increases, signaling a potential industry-wide shift in response to tariff impacts.

Wallstreetcn

Walmart

Trump criticizes Walmart for price increases, "Made billions last year, yet still won't bear the tariffs!"