Walmart CEO: Trump's tariffs force price hikes on toys, electronics
Donald Trump's tariffs "are too high," according to the CEO of Walmart, the world's largest retailer. The American giant will raise prices in May due to the ongoing trade war.
Walmart is the world's largest retailer with annual revenues of about $611 billion (data for 2023). The company has announced that it will raise prices on some products due to the tariffs imposed by Donald Trump. Higher tariffs increase the company's costs.
According to CNBC, Walmart CEO Doug McMillon stated that the company will make every effort to keep prices as low as possible. However, he noted that the scale of the tariffs is so significant that, even with reductions, Walmart cannot absorb all the financial pressure due to its relatively low retail margins.
Higher tariffs and higher prices in stores
It's important to note that there was recently a breakthrough in trade negotiations between the US and China. The United States lowered tariffs on Chinese goods to 30% (down from a record 145%). China, in turn, lowered tariffs on US goods to 10% (from 125%). This level of tariffs is set to be in force for 90 days.
The CEO of Walmart added that the price increases primarily affect toys and electronics from China. Food prices are also rising due to tariffs imposed on goods from Peru, Costa Rica, and Colombia.
John David Rainey, Walmart's CFO, announced that customers can expect to see higher prices by the end of May and into early June. He explained that this price increase is a consequence of the company’s reliance on importing certain goods.
Higher tariffs present a challenge for the retail industry and create problems for consumers, who will have to dig deeper into their wallets. However, this is downplayed by Trump, who mentioned that "there will be some difficulties," but they must be overcome.
"I don't think that a beautiful baby girl needs – that's 11 years old – needs to have 30 dolls. I think they can have three dolls or four dolls because what we were doing with China was just unbelievable. We had a trade deficit of hundreds of billions of dollars with China," Trump said, referring to rising prices in stores.
These remarks did not sit well with Mike Pence, former Vice President of the USA during Trump's first term. "Keeping dolls affordable, keeping our kids’ toys affordable, that really is part of the American dream," commented Mike Pence on Trump's words on CNN.
Walmart has about 5,000 stores in the USA. Ninety percent of US citizens live within 10 miles of a Walmart. Worldwide, the company employs 2.1 million people, of which over 76% are in the United States.
