Walmart, the world’s largest retailer, has a warning for its customers: higher prices are coming due to tariffs from the Trump administration.
President Donald Trump has made tariffs a centerpiece of his second term, announcing in April that more than 100 countries will have tariffs imposed on them.
In the weeks since his announcement, however, the Trump Administration has rolled back some of the tariffs, according to ABC News.
Most recently, the administration announced it would cut its tariffs imposed on China from 145% to 30% for a temporary period, according to the New York Times. China, in response would lower its import duty on American goods from 125% to 10%, the New York Times reported.
John David Rainey, the chief financial officer for Walmart, told CNBC in an interview that it was good the Trump administration brought down the tariff levels imposed on China but added that they are “still too high.”
“We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb,” he said. “It’s more than any supplier can absorb. And so I’m concerned that the consumer is going to start seeing higher prices.”
Rainey said that price hikes will likely happen towards the end of the month.
“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.”
During an earnings call on Thursday, Walmart CEO Doug McMillon said that tariffs on China are raising the costs of electronics and toys, according to CNN.
He added that some food costs are also going up because of tariffs on Costa Rica, Peru and Colombia.
“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,” McMillon said. “Even at the reduced levels, the higher tariffs will result in higher prices.”
Other companies, including Mattel and Procter & Gamble, announced they too would likely have to raise prices to offset the costs of the tariffs, according to the Associated Press.
An Economist/YouGov poll released this month found that a majority of Americans — 74% — believe tariffs will increase prices. Of those who responded to the poll, 44% said that prices will increase by “a lot” while 30% said they will increase only “slightly”.
A majority of respondents, 54% also said that tariffs are more likely to hurt the U.S. economy while 30% said that tariffs will help.
The poll was conducted between May 9 and May 12 with a sample size of 1,786 U.S. adults and a margin of error of plus or minus 3.3%.
