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By Marni Rose McFall
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Walmart has warned that it plans to raise prices on some products in the wake of Donald Trump's tariffs.
"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," Walmart CEO Doug McMillon said in a statement on Thursday.
Why It Matters
Trump announced his sweeping tariffs on U.S. trading partners around the world on April 2, on what he called "liberation day." The White House said the wide-reaching levies had been introduced to tackle "large and persistent annual U.S. goods trade deficits."
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Walmart is the largest retailer in the world, with nearly 95 percent of Americans visiting one of its stores at least twice a year, according to AiTechtonic. The price rises could therefore impact millions of people across the U.S.
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What To Know
Walmart's chief financial officer John David Rainey told CNBC on Thursday that tariffs are "still too high," even after the U.S. and China agreed a 90-day pause on Monday. The U.S. announced that it would lower tariffs on Chinese imports from 145 percent to 30 percent, while China said it would drop levies on US goods to 10 percent from 125 percent.
"We're wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb. And so I'm concerned that consumer is going to start seeing higher prices," Rainey said.
"You'll begin to see that, likely towards the tail end of this month, and then certainly much more in June."
He added: "There are certain items, certain categories of merchandise that we're dependent upon to import from other countries. Prices of those things are likely going to go up. And that's not good for consumers."
Two-thirds of Walmart's products are sourced in the U.S., with groceries accounting for around 60 percent of Walmart's U.S. business.
Numerous companies have raised their prices to mitigate cost increases as a result of Trump's universal 10 percent tariffs on products entering the U.S.
Last week, the Federal Reserve said that tariffs had led to an increase of 0.3 percent in prices this year.
Despite the tariffs, Walmart sales (excluding fuel) rose by 4.5 percent at U.S. stores in the first quarter of this year.
Rainey said the first quarter "demonstrates the strength of our business and the relevance of our omni strategy in the context of a highly dynamic backdrop," in prepared remarks shared with Newsweek via email.
How Walmart Has Addressed Tariffs So Far
Following Trump's tariff announcement in April, Walmart vowed to keep its prices low.
The retailer said it was well equipped for the challenge. "History tells us that when we lean into these periods of uncertainty, Walmart emerges on the other side with greater share and a stronger business," Rainey said.
McMillion also told investors in a statement in April: "We've learned how to manage through turbulent periods."
Retailers on all ends of the spectrum have also announced plans to raise prices, including China-base e-commerce companies Shein and Temu, as well as luxury brands Hermes and Ferrari.
What People Are Saying
Rainey, told Newsweek in prepared remarks via email: "As we look ahead, while operating conditions are expected to remain dynamic, our strategy is clear, our top-line momentum is strong, and we are flexing into our advantages to protect margins as we grow."
What Happens Next
Walmart's price rises are set to begin later this month.
The retailer said on Thursday that the current uncertainty surrounding trade is making it difficult to plan for the future.
Update 05.16.25 05:27: This article has been updated with additional infromation.
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