May 15 (UPI) — During an earnings call Thursday, Walmart said it will be forced to raise prices soon even with the reduced tariffs on China as trade with the United States is negotiated.
Price increases will happen later this month.
Walmart CEO Doug McMillon said during the call, “Even at the reduced levels, the higher tariffs will result in higher prices.”
Walmart said the Trump administration higher tariffs on U.S. trading partners are working against efforts by Walmart to keep prices low.
McMillion said Walmart operates on narrow retail margins.
During a CNBC interview, Walmart Chief Financial Officer John David Rainey said, “We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb. It’s more than any supplier can absorb. And so I’m concerned that the consumer is going to start seeing higher prices.”
He said tariffs are still too high for Walmart to maintain low prices, so prices are going up toward the end of May and into June.
Walmart just missed the revenue projection for the fiscal first quarter, the first time it has missed quarterly revenue targets since February 2020 at the start of the COVID pandemic.
For the first time, though, Walmart’s e-commerce sales showed profit with a sales increase of 21%.
Current Trump tariffs are 10% on nearly all imports plus specialized much-higher tariffs on steel, aluminum and autos.
China’s tariffs have been lowered to 30% while negotiations on re-setting the trade with the United States continue.
Chinese e-commerce retailers Shein and Temu raised prices for U.S. customers in April, citing the higher tariffs.
They said in a statement the price increases imposed April 25 were “due to recent changes in global trade rules and tariffs.”
According to the Federal Reserve, tariffs have already led to a 0.3% hike in prices this year.
Toy maker Mattel said last week it plans price increases because of the tariffs.
