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Trump tells Walmart to 'eat the tariffs' instead of raising prices

Trump tells Walmart to 'eat the tariffs' instead of raising prices

Trump Urges Walmart to Absorb Tariff Costs

Introduction

On May 17, 2025, U.S. President Donald Trump publicly called out Walmart, urging the retail giant to absorb the costs of tariffs imposed by his administration rather than passing them on to consumers through price increases. This statement, made via a social media post, followed Walmart’s announcement that it would raise prices due to high tariffs on imported goods. The directive has sparked debate about corporate responsibility, consumer impact, and the broader implications of Trump’s tariff policies.

Trump’s Statement

In a fiery post on X, Trump stated, “Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING.” He emphasized that Walmart’s substantial profits—$27.0 billion in adjusted operating income for fiscal year 2025, according to Walmart’s annual report—should enable the company to absorb tariff costs without burdening consumers. Trump also warned that his administration would closely monitor Walmart’s pricing decisions.

Walmart’s Position

Walmart CEO Doug McMillon had earlier stated on May 14, 2025, that the retailer could not fully absorb the costs of Trump’s proposed tariffs, which include a 25% duty on imports from Canada and Mexico and up to 20% on other imports, including 60% on Chinese goods. With Walmart’s reliance on imported products—over 60% of its general merchandise comes from China—the company argued that its thin retail margins (approximately 3–4%) make it challenging to absorb these costs without raising prices. McMillon noted that price increases would begin later in May 2025, potentially affecting a wide range of products, from electronics to clothing.

Context of Tariff Policies

Trump’s tariff policies, reintroduced in 2025, aim to boost domestic manufacturing by imposing duties on imported goods. These include:

  • 25% tariffs on imports from Canada and Mexico, affecting oil, auto parts, and agricultural products.
  • 10–20% tariffs on imports from other countries, with 60% tariffs on Chinese goods, targeting Walmart’s supply chain heavily reliant on China.

The administration argues that these tariffs will encourage companies to source domestically, reducing reliance on foreign goods. However, critics, including economists and some X users, argue that tariffs act as a tax ultimately passed on to consumers, increasing prices without necessarily reducing imports if companies like Walmart absorb costs without changing sourcing.

Public and Expert Reactions

The response to Trump’s directive has been mixed:

  • Support: Some X users, like @Totinhiiio, praised Trump’s stance, calling it a “bold ultimatum” to protect consumers from price hikes and urging Walmart to leverage its profits. Others view it as a stand against corporate greed.
  • Criticism: Analysts and users, such as @MarkInvicta, argue that Trump’s approach is contradictory, as absorbing tariffs without raising prices may not incentivize domestic purchasing—the stated goal of the tariffs. @DA_Stockman criticized the president for acting as a “national price Czar,” questioning the logic of imposing tariffs and then demanding companies absorb the costs.
  • Industry Perspective: Posts on X, like one from @bknybosslife, highlight that tariffs are a supply chain cost, and Walmart’s thin margins make absorption difficult without impacting profitability or operations. The retailer’s scale allows it to negotiate better deals with suppliers, but smaller retailers may struggle more, potentially giving Walmart a competitive edge.

Broader Implications

The dispute underscores broader tensions in Trump’s economic policy:

  • Consumer Impact: If Walmart absorbs tariffs, it could strain profits or lead to cost-cutting elsewhere, such as reduced wages or job cuts. If prices rise, consumers face higher costs, with estimates suggesting a 1–2% increase in retail prices across the board, per the National Retail Federation.
  • Supply Chain Dynamics: Walmart’s reliance on Chinese imports (over $400 billion annually in goods) makes it vulnerable to tariffs. Shifting to domestic suppliers could take years and increase costs due to higher U.S. labor rates.
  • Political Ramifications: Trump’s public pressure on Walmart aligns with his populist rhetoric but risks alienating businesses. Earlier in 2025, meetings with big-box retailers like Walmart and Target led to a temporary reversal of some tariff plans after warnings of empty shelves and price spikes.

Conclusion

President Trump’s call for Walmart to “eat the tariffs” reflects his administration’s push to shield consumers from price increases while enforcing protectionist trade policies. However, Walmart’s thin margins and heavy reliance on imports highlight the challenges of absorbing these costs. The debate, amplified on X and in media, reveals a divide between protecting consumers and the economic realities of tariffs. As Walmart navigates these pressures, the outcome will likely influence retail pricing, consumer behavior, and the broader implementation of Trump’s tariff agenda in 2025.

Sources: Reuters, Walmart Annual Report 2025, National Retail Federation