New Tariffs May Spark Price Hikes At Walmart
Walmart (NYSE: WMT) is warning that it may have to hike product prices after the Trump administration imposed new tariffs on Chinese imports. Earlier this week, the US government imposed 10 percent tariffs on about $200 billion worth of Chinese imports. Walmart is currently the world’s largest retailer and a considerable amount of its business would be affected by the tariffs.
Walmart apparently wrote to US Trade Representative Robert Lighthizer two weeks ago voicing concerns about the planned tariffs. In the letter, Walmart claimed the tariffs would impact the prices of a wide variety of the products it sells, including food products, personal care items, bicycles, and Christmas lights. Walmart wrote in its letter: “As the largest retailer in the United States and a major buyer of US manufactured goods, we are very concerned about the impacts these tariffs would have on our business, our customers, our suppliers and the US economy as a whole.”
The US and China have been engaged in a tit-for-tat trade war that shows no signs of abating. As the US has imposed tariffs on Chinese-made products, China has in turn imposed tariffs on American-made products. Both countries have been calling the other’s actions unfair and have taken steps to mitigate the immediate impacts on some targeted industries.
In the US, the Trump Administration has pledged to provide aid to farmers harmed by the tariffs imposed by China. The aid is meant to replace the income they are losing, but the farmers fear that it will not be nearly enough to cover their losses. Farmers are not the only ones worried about the long-term effects of the tariffs. Many businesses that have Chinese products in their supply chains are worried as well.
Because the US imports much more from China than the reverse, the US currently has an advantage in the economic struggle. However, the Chinese tariffs seem to be narrowly targeted to industries with a large presence in US states that voted heavily for Donald Trump in the 2016 presidential election. China may also choose to begin targeting American firms with investments in China if the situation escalates further. At the moment, it appears that neither side is willing to blink first.