The Walmart at 355 Lincoln Ave., East Stroudsburg, is seen on April 24, 2025.
New York, New York – Walmart, the world’s largest retailer, is warning customers to brace for higher prices due to ongoing tariffs stemming from former President Donald Trump’s global trade war. The company said Thursday that while it has tried to shield consumers from rising costs, the current tariff levels are “too high” for it to absorb without raising prices on select items—with hikes set to begin later this month.
“We will do our best to keep our prices as low as possible,” Walmart CEO Doug McMillon said on an earnings call. “But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins.”
Walmart’s main pain points are higher costs on goods imported from China, such as electronics and toys, and food products from countries including Costa Rica, Peru, and Colombia. Walmart finance chief John David Rainey told CNBC that consumers could see higher prices by the end of May, with more noticeable increases in June.
Although Washington and Beijing recently agreed to lower some tariffs, the U.S. still imposes a 30% levy on most Chinese imports. While Walmart applauded the reduction from previous 145% tariff levels, the company maintains that the current rates are still burdensome.
“There are certain categories of merchandise that we’re dependent upon to import from other countries,” Rainey said. “Prices of those things are likely going to go up. And that’s not good for consumers.”
The Federal Reserve estimates tariffs have already contributed to a 0.3% price rise this year. Retailers, including Walmart, have responded with targeted price increases, product eliminations, and in some cases, full catalog hikes to offset the costs.
The situation puts Walmart in a delicate political position. Publicly attributing price increases to tariffs risks backlash from Trump, who has criticized companies like Amazon and Mattel for doing so in the past. After the company announced plans to raise prices, Trump even threatened to double tariffs on Mattel’s toys.
Despite these challenges, Walmart continues to post strong performance. U.S. sales rose 4.5% last quarter, primarily driven by grocery sales and growth among higher-income shoppers. The company’s stock rose 2% in pre-market trading Thursday.
Analysts believe Walmart’s size, supplier network, and relatively small exposure to Chinese imports — just 15% of its product base — give it an edge over competitors in navigating the trade war. Around 60% of Walmart’s inventory is domestic groceries, offering further insulation from tariff effects.
Still, McMillon expressed concern about long-term planning amid ongoing trade uncertainty, calling the near-term environment “exceedingly difficult to forecast.”
