Walmart — the world's largest retailer — issued a warning to customers that they may pay more for the same products if President-elect Donald Trump makes good on his promise to impose new tariffs on imports.
Walmart's finance chief, John David Rainey, acknowledged that new tariffs would likely be passed on to the people buying goods imported from overseas, Fortune reported Friday. Currently, anywhere from 70% to 80% of goods sold at Walmart are made in China, and could be affected by potential new tariffs. In September, PBS reported that Trump proposed tariffs as high as 60% on imports from China, and 20% tariffs on products made elsewhere.
"Tariffs are going to be inflationary, there’s no disputing that," Rainey said earlier this week.
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“We’re going to work with our suppliers as well as our own private brand assortment to continue to try to bring down prices for customers,” he added. “But we’re not immune, and tariffs will be inflationary for customers.”
While Trump has argued that a tariff is a tax imposed on a foreign country with no downside for Americans, the National Retail Federation (NRF) says that's not true. On the eve of Election Day, NRF vice president Jonathan Gold stated that unless exporters are willing to drop factory gate prices, tariffs will be paid with either higher import duties, higher prices or a combination of the two.
"A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter," Gold said.
In September, journalist David Cay Johnston pointed out that if Trump's proposed tariffs become reality, it would incentivize American companies to raise prices far beyond what it would cost to cover the tariff in order to maximize profit margins. He warned that in this way, Trump's key economic proposal would "aggressively transfer wealth from the poor to the rich."
Click here to read Fortune's report in full.
