Walmart: "30% tariff on China is still too high, we have no choice but to raise prices!"

On May 16th, the South Korean media "Today Finance" published an article stating that the largest retailer in the United States, Walmart, announced it would increase consumer prices. This is because the increased tariffs imposed by Donald Trump have added costs. Observers believe that Walmart's price hike may spread like dominoes to other companies.

According to The Wall Street Journal, Walmart announced it would gradually raise the prices of its products starting from the end of this month.

John David Rainey, Walmart's Chief Financial Officer (CFO), stated at a conference call with analysts after announcing quarterly earnings, "We are doing our best to keep prices as low as possible, but considering the retail profit margin is still very low, even a reduction in tariffs is not enough to overcome the pressure to raise prices. At the same time, due to the tariffs being still too high, American consumers will see price increases for Walmart products at the end of May, especially in June."

In response to the U.S. decision to temporarily reduce the additional tariff on Chinese imports from 145% to 30% for a period of 90 days starting May 14th, Rainey said, "Although there has been improvement, this is still a very high tariff for most consumers."

Rainey explained that Walmart has not yet released its quarterly profit forecast because it may absorb some tariff costs to maintain prices lower than those of its competitors.

Doug McMillon, Walmart's CEO, said, "President Trump's 145% tariff has had the greatest impact on toys and electronics from China." He also expressed gratitude for Trump's recent decision to reduce effective tariffs on China to 30%, saying, "I hope this agreement can lead to long-term agreements and tariff reductions."

The Wall Street Journal pointed out, "If Walmart raises prices, other retailers may follow suit." In addition, Home Depot, Target, and Lowe's plan to release their earnings reports next week, and they may also announce price hikes.

In the United States, not only the retail industry but also the severely affected automotive industry is raising prices. One of the three major American automobile manufacturers, Ford Motor Company, has notified its U.S. dealers to increase the prices of three vehicles produced in Mexico. The French luxury brand Hermès also announced plans to raise prices in its U.S. stores starting June, among all global stores.

The Wall Street Journal noted that the impact of tariffs has not yet been fully reflected in the products sold in retail stores. Analysts believe this is also due to companies ensuring product safety before tariffs take effect and delaying price increases as much as possible.

Source: https://www.toutiao.com/article/1832279919089753/

Disclaimer: The article represents the views of the author alone.