Walmart is warning that U.S. consumers will begin to see higher prices as early as June due to President Donald Trump's sweeping tariffs, even after a temporary reduction in levies on Chinese imports. The retail giant's stance has sparked a public rebuke from Trump, who accused the company of unfairly blaming his trade policies and urged it to "EAT THE TARIFFS."
"We have always worked to keep our prices as low as possible and we won't stop," Walmart spokesperson Joe Pennington said in a statement to USA Today. "We'll keep prices as low as we can for as long as we can given the reality of small retail margins."
The dispute intensified after Walmart posted better-than-expected Q1 results, with revenue rising 2.5% year-on-year to $165.6 billion, yet warned that continued tariff exposure could pressure profitability. The company joins a growing list of major retailers, including Target and Best Buy, in flagging the cost burden of trade policies implemented by the Trump administration.
In an earnings call, Walmart CEO Doug McMillon acknowledged the May 12 U.S.-China agreement that reduced tariffs for 90 days-from 145% to 30% on Chinese imports and from 125% to 10% on U.S. exports. Still, McMillon said, "Even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins."
Trump responded on Truth Social: "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."
Walmart's Chief Financial Officer John David Rainey said in an interview with CNBC that the scale of the tariffs remains problematic. "We've not seen a period where you've had prices go up this high this quickly," Rainey said. "We're well equipped and experienced in dealing with elasticities or price increases that are going up two or three percent, but not 30 percent."
Rainey warned that the tariff burden would likely result in higher prices for categories including electronics, toys, and food by late May and June. He also noted that tariffs on imports from Latin American countries like Costa Rica, Colombia, and Peru were specifically impacting goods such as bananas, avocados, coffee, and roses.
During the earnings call, McMillon thanked President Trump and Treasury Secretary Janet Yellen for progress in negotiations, but reiterated the limits of Walmart's pricing model. "The magnitude of these increases is more than any retailer can absorb," Rainey added.
White House Press Secretary Karoline Leavitt dismissed Walmart's warning, stating, "The reality is, as the president has always maintained, Chinese producers will be absorbing the cost of these tariffs."
Despite the headwinds, Walmart reaffirmed its full-year outlook, forecasting $674.5 billion in net sales, up from $643 billion, and $29.5 billion in operating income. Still, uncertainty around tariffs prompted Walmart to withhold profit guidance for Q2, signaling continued volatility in the months ahead.
