May 17 (UPI) — A recent Walmart earnings report citing tariffs aa a potential reason for raising prices promoted President Donald Trump to tell the world’s largest retailer to “eat the tariffs.”
“Walmart should stop trying to blame tariffs as the reason for rising prices throughout the chain,” Trump said Saturday morning in a Truth Social post.
“Walmart made billions of dollars last year,” Trump said, adding that its earnings were “far more than expected.”
“Between Walmart and China, they should, as is said, ‘eat the tariffs,’ and not charge valued customers anything,” he said.
The president said he will be “watching, and so will your customers!!!”
Narrow retail margins that are less than those of other business sectors might make it impossible for Walmart to simply eat the cost of tariffs.
“We have always worked to keep our prices as low as possible, and we won’t stop,” Walmart said in a statement to CNBC. “We’ll keep prices as low as we can for as long as we can given the reality of small retail margins.”
Trump made his social media comment two days after Walmart President and Chief Executive Officer Doug McMillon told investors Trump’s tariff policies might require the retailer to raise prices on affected goods.
“We will do our best to keep our prices as low as possible, but given the magnitude of tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure,” Doug McMillon, Walmart president and chief executive officer, said during an earnings call on Thursday.
Walmart’s latest guidance and forward-looking statements affirm tariffs are among factors that could significantly impact its earnings throughout the rest of the year and possibly beyond.
“The company’s results may be materially affected by many factors, such as fluctuations in foreign currency exchange rates, changes in global economic and geopolitical conditions, tariff and trade policies, customer demand and spending, inflation, interest rates, world events and various other factors,” Walmart’s earnings report says.
Rapidly changing costs are making it difficult for the retailer gauge the near-future of Walmart Chief Financial Officer John Rainey told CNBC on Thursday.
“We have not seen price increases at this magnitude in the speed in which they’re coming at us before,” Rainey said. “It makes for a challenging environment.”
The electronics and toys that Walmart sells mostly come from China, which so far is subject to a 30% tariff.
The retailer also sells goods from Central and South America, such as bananas, coffee and avocados, which also are subject to at least a 10% tariff.
Rainey told CNBC the retailer wants to keep its prices below its competitors’ prices for similar goods, which would require absorbing cost increases due to tariffs.